New Delhi, Aug. 14 -- Timely EMI payments for a personal loan or any other loan have the highest weightage in calculating the credit score. Hence, the borrower must pay the EMI before or by the due date. However, in some cases, despite their best efforts, a borrower may be unable to pay the EMI on time. Some reasons for these include job loss, delay in salary, a salary cut, using the money for a medical or any other emergency, etc. In such a case, the bank has to categorise the loan as an NPA if the EMI remains unpaid for a specified period.

In this article, we will understand what an NPA is, the process of categorising a loan as an NPA, and what happens when a loan is categorised as an NPA.

As per RBI guidelines, if a borrower doesn't ...