Missed a few EMIs? Getting constant reminders from your lender? Worried about legal action or credit score damage?
You’re not alone. But what actually happens behind the scenes when you default on a loan is something every borrower should understand.
Let’s break it down—and also explore how Vizzve Finance helps you avoid the trap and bounce back smartly.
What Is a Loan Default?
A loan default happens when you fail to repay your EMIs over a specific period (usually 90+ days). It triggers a formal recovery process from the lender’s side.
There are three major stages:
Step-by-Step: Loan Default to Recovery
1. Missed EMI & Reminder Calls (0–30 Days)
You'll receive SMS, emails, or calls reminding you of the missed payment.
Interest and late fees start adding up.
CIBIL score starts dropping.
2. Soft Recovery Phase (30–90 Days)
Lenders will try to contact you via customer care or recovery agents.
You may get offers for restructuring, part payment, or EMI moratorium.
Still no legal action—just negotiation.
3. Legal Notice & Hard Recovery (90+ Days)
Lender classifies the loan as an NPA (Non-Performing Asset).
Legal notices under SARFAESI Act (for secured loans) or civil suits (for personal loans) may be issued.
Recovery agents may visit, and in rare cases, assets may be seized.
What Lenders Really Do Behind the Scenes
Check borrower credit history and repayment behavior
Notify credit bureaus (CIBIL, Experian)
Involve a recovery agency if dues are high
Evaluate chances of compromise settlement
Assess feasibility of legal or arbitration-based recovery
Credit Score Impact of a Default
Loan defaults stay on your credit report for up to 7 years and can lower your CIBIL score by 100–150 points or more.
This affects your ability to:
Get future loans or credit cards
Apply for home/car finance
Access business loans or EMI-based purchases
How Vizzve Finance Helps You Avoid Default
At Vizzve, we believe in proactive finance—helping borrowers before it’s too late.
✅ EMI Alerts & Friendly Reminders
We notify you ahead of EMI dates and provide grace periods for genuine delays.
✅ Smart Restructuring Support
Our team helps you restructure loans when facing a cash crunch—without credit score damage.
✅ No Harassment Policy
We follow ethical, RBI-approved recovery practices. No threats, no illegal agent behavior.
✅ Debt Resolution Plans
Get help managing multiple EMIs with personalized repayment advice and debt consolidation options.
✅ Education Over Intimidation
We focus on financial literacy. Vizzve gives you tools to manage repayments stress-free and smartly.
FAQs:
1. Can I go to jail for a loan default in India?
No. Loan defaults are a civil issue, not a criminal one. You can’t be jailed but may face legal action and asset seizure.
2. Will my family be affected by my default?
Only co-applicants or guarantors are affected. No one else is liable legally.
3. Can I recover my credit score after a default?
Yes, with consistent repayment and settlement, your score can improve over time.
4. What is the SARFAESI Act?
It allows banks to seize secured assets like property or vehicles without court permission after a loan becomes an NPA.
5. How does Vizzve recover unpaid loans?
Through soft recovery, customer-first negotiation, and ethical resolution—not harassment or misuse of data.
Conclusion: Understand, Don’t Panic
Defaulting on a loan is serious—but not the end of the road. What matters most is how you respond.
At Vizzve Finance, we walk with you through repayment stress and offer:
💬 Friendly, respectful communication
📉 Smart loan restructuring
💼 Legal and ethical debt recovery methods
📈 Tools to rebuild your credit health
So, the next time you miss an EMI—don’t fear. Reach out to Vizzve. We’re here to help.
Published on : 4th August
Published by : SMITA
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed