New Delhi, March 27 -- Personal loans have become an increasingly popular financial instrument. However, defaulting on a personal loan can result in severe consequences for borrowers. It's imperative to understand the outcomes of failing to repay a personal loan for good personal finance practices.

Below are some important points that should be kept in mind when a borrower is aiming to raise a personal loan to avoid the harsh consequences of not paying it on time.

Defaulting on a personal loan can immediately harm the borrower's credit score. Indian credit scores are between 300 and 900, and defaulting can lead to enormous drops.

A poor credit score complicates future borrowing and compels new loans to be at a greater rate of interest....