New Delhi, Dec. 24 -- A personal loan default can quickly escalate from missed EMIs to legal trouble to strict recovery action. Lending institutions are permitted to initiate recovery proceedings if payments remain unpaid for an extended period, as specified in the terms and conditions of the loan agreement.

In such a situation, straightforward communication with the lending institution, along with proper vigilance and proactive steps, can still help you avoid serious ramifications. Keeping the above factors in mind, here are some simple yet practical steps to take if you have defaulted on a personal loan repayment earlier.

When you ignore a personal loan default, it can seriously hamper your credit score. This will make future borrowin...