Any time you do not adhere to the terms of your business loan, like making an EMI payment on time, you are defaulting on your business loan.
Defaulting on a loan has a drastic impact on your credit report, and therefore your attractiveness to lenders and your future loan prospects.
When you take a loan from a lender or buy something on EMI, your goal should be paying your EMIs instalments on time to avoid defaulting. You can do this by simply setting automatic reminders on your phone or email to help you remember to make your payments on time. Another way is to always have enough money in your account to cover your EMI payments.
If you’re noticing a dip in business and feel like you may be unable to meet your upcoming EMI obligation, contact your lender ASAP. Communication is key when borrowing. Keeping your lender in the loop allows them to help find a solution to your problem that works for both of you.
Click here to learn other ways you can avoid defaulting on your business loan.
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