New Delhi, Sept. 21 -- When an EMI payment fails, for reasons such as late salary credit, an insufficient balance, or a technical glitch, borrowers may have to deal with more than just a penalty from the lender. A bounced EMI can also lower your credit score, as details of missed or delayed repayments are reported to credit bureaus.

However, the timing of such reporting and whether borrowers get a grace period to rectify the payment error depends on the applicable rules. This provision can be useful in cases where auto-debit failed due to a technical glitch from the banking portal's end or genuine oversight.

An EMI bounce happens when a lender's attempt to auto-debit a borrower's scheduled EMI from their bank account fails. While insuff...