Trouble repaying a loan? Start by understanding where you stand.

Missed EMIs are stressful, and the letters and calls that follow use words most people have never had explained. This page tells you, in plain language, what usually happens, what the words mean, what you can ask your lender for, and how to keep your papers in order. Take it one step at a time.

What usually happens when instalments are missed

1. First days: reminders by SMS, call or letter. Late-payment charges may apply.
2. Up to 90 days overdue: the account is marked as "special mention" (SMA-0, SMA-1, SMA-2 by days overdue). The lender may call more often.
3. More than 90 days: the account is classified as a non-performing asset (NPA). Recovery steps become more formal; for secured loans, notices under the SARFAESI Act may follow.
4. Any stage: you can ask for a written statement of dues, discuss restructuring or, in some cases, a one-time settlement. Every option is the lender’s decision.

The day counts are the RBI’s classification rules; each lender applies them in its own process. Read more: Understanding SMA & NPA.

Words you will hear

• Overdue — an instalment not paid by its due date.
• SMA / NPA — the lender’s classification of how far behind the account is.
• Restructuring — changing tenure, instalment or schedule so the loan continues. → Loan restructuring
• One-time settlement (OTS) — the lender accepts a lower agreed amount and closes the account; it stays on your credit report as "settled". → One-time settlement
• ARC — an asset reconstruction company that a lender may sell the loan to. Your loan and its terms remain; you now deal with the ARC, which must follow the same rules on fair conduct.
• Debt consolidation — replacing several loans with one. It can simplify repayment and can also lengthen it; compare the total cost, not just the new EMI.

What you can ask your lender for

• A written statement of the amount due, with interest and charges shown separately.
• Copies of the loan agreement and sanction letter, if you do not have them.
• The lender’s written response to any request for restructuring or settlement.
• Details of the recovery agent, if one contacts you; agents must identify themselves and follow the lender’s code of conduct.

If the lender does not reply within 30 days or the reply is unsatisfactory, you can complain free to the RBI Ombudsman at cms.rbi.org.in.

Keep your papers in order

Loan agreement · sanction letter · EMI schedule · payment receipts and bank entries · every notice and letter, with dates · a note of every call. Put them in one folder, in date order. This is what you will need for any conversation with the lender, an adviser or a lawyer.

Our service: guidance on organising your papers

If you would like help, we go through your loan papers, notices and payment history with you and produce an organised list with gaps marked, so you can speak to your lender clearly. We do not negotiate with lenders, file OTS applications, reply to legal notices or represent you. The fee is stated in writing first.

Be careful: anyone who promises to "clear", "waive" or "settle" your loan for an advance fee is not acting for your lender. Only your lender can agree to a settlement, and payment goes to the lender.

If you have received a legal notice, please consult a qualified lawyer promptly. We cannot advise on legal notices.

Read more

• Understanding SMA & NPA — the stages, day counts and what changes at each.
• One-time settlement (OTS) — how it works, what it costs your credit record, and the common fraud.
• Loan restructuring — what can change, what to ask for in writing.

What we do here: we explain the process and how you can put your own loan papers, notices and payment history in order. We do not negotiate with lenders, file applications, reply to legal notices or represent you. See what we do.