New Delhi, March 11 -- Missing an Equated Monthly Instalment (EMI) payment by a day in India can result in serious fines along with a blow to your credit score. Lenders are tightening policies, and it is crucial that the borrower knows the effects of late payments and how to be exempted from them.

Late charges are also variable, depending on the lender and the terms of the loan. Banks, for example, might charge late charges and interest on the balance. These charges accumulate very fast, and it is even more challenging to pay off your debt. New RBI regulations are intended to make it transparent by taking accounts as 'past due' only when they are overdue for more than three days from the date given in the billing statement.

For example:...