Missed EMI? Your Loan Could Become an SMA! Understand the Risks and How to Avoid Them

• Missing an EMI can lead to your loan being classified as a Special Mention Account (SMA) by banks.
• SMA is a warning signal indicating financial instability and can negatively impact your credit score.
• There are three stages of SMA (SMA-0, SMA-1, SMA-2) based on the delay in EMI payments, leading to NPA after 90 days.
• An SMA status is reported to Credit Information Companies (CICs) and can affect future loan applications.
• Avoid SMA by making timely payments, setting auto-debit, and regularly checking your credit report for errors.

Why It Matters: Missing an EMI can classify your loan as an SMA, impacting credit scores and future loan eligibility.