Missed EMI on a digital loan? Here's what borrowers need to know
For many people, digital lending apps offer a quick solution during emergencies. But for some borrowers, the problems begin when they are unable to repay on time.
- Jun 29, 2026,
- Updated Jun 29, 2026 2:40 PM IST
A single missed EMI is leaving some digital loan borrowers facing repeated calls, threats and growing stress, raising concerns over recovery practices as India's digital lending market continues to expand.
Digital lending has made borrowing quicker and easier for millions of Indians, with loans often approved within minutes. But while access to credit has improved, some borrowers say aggressive recovery tactics, high interest rates and concerns over personal data are turning short-term financial help into long-term distress.
Quick loan, growing pressure
For many people, digital lending apps offer a quick solution during emergencies. But for some borrowers, the problems begin when they are unable to repay on time.
Don't Miss: ₹2–2.5 crore for a 2BHK? Delhi resident's reddit post sparks housing affordability debate
A 28-year-old woman from Delhi, who did not wish to be named, told India Today that she borrowed ₹1 lakh through a digital lending app after losing her job during a company restructuring. She said the money reached her account within minutes and added, "The money came within minutes. I thought I'd repay it after finding another job."
She could not repay the loan on time.
According to her, recovery agents initially called once or twice a day. Within a week, the calls became relentless, sometimes every hour. She said they warned that her employer and family would be informed if she failed to repay. Unable to cope with the pressure, she borrowed money from a friend and cleared the loan.
She said the repeated calls were more difficult than the loan itself, adding, "The loan wasn't the worst part. The fear was."
Most distressed borrowers reported harassment
An internal survey by Expert Panel, a firm that provides legal support for loan resolution and protection from financial harassment, surveyed 10,000 distressed borrowers.
The survey found that:
- Nearly 72% said they had experienced harassment by recovery agents.
- Around 67% reported repeated calls from multiple numbers.
- 11% said recovery agents visited their homes or workplaces.
- 8% received threats of legal action.
Young Indians are driving digital lending
The survey found younger borrowers account for a large share of digital loan users.
It said Gen Z makes up 41% of first-time borrowers, with nearly 46% taking loans to buy smartphones, laptops and other gadgets.
Millennials account for around 45% of personal loan borrowers, often borrowing for lifestyle expenses, home improvements or to start small businesses.
The survey said digital lending has widened access to credit, particularly for people who may not qualify for traditional bank loans. However, it also found that borrowing has become easier than understanding the risks involved.
Concerns over access to personal data
Many digital lending apps ask users to allow access to contacts, photos and media files before approving loans.
Anurag Mehra, Director of Expert Panel, said borrowers should be cautious if a lending app asks for such permissions.
He said, "The biggest red flag is any app asking for access to your contacts or personal media as a condition for granting a loan." He added, "That's not required for lending. It's data collection for leverage."
Mehra said borrowers should also be careful of apps charging unusually high processing fees, offering repayment periods of just one or two weeks, or charging annual interest rates above 25%.
He advised borrowers to check whether the lender is backed by an RBI-regulated bank or NBFC before downloading the app.
A cycle of borrowing
For some borrowers, one loan leads to another.
A delivery executive from Delhi-NCR borrowed ₹1 lakh to repair his motorcycle after an accident and meet other expenses. The repayment period was three months.
When he could not repay the loan, he took another digital loan to settle the first. He eventually found himself repaying three different lenders.
He said he was no longer borrowing because he needed money, adding, "I wasn't borrowing because I needed money anymore. I was borrowing just to keep up with repayments."
The survey found that while banks generally charge interest rates between 10% and 20%, around 45% of digital loan users paid annual interest rates above 25%.
It also said some unregulated lenders charge effective annualised interest rates running into several hundred per cent, making repayment extremely difficult. Hidden processing charges and unclear loan terms can add to the burden.
'Consumer trust is key'
Shakti Shekhawat, Business Head at BharatLoan, said the emotional impact of aggressive recovery practices is often overlooked.
He said, "Repeated calls, public shaming or involving family members and employers can create anxiety, emotional distress and reputational concerns."
Shekhawat said collections should be handled with empathy and transparency, adding that the long-term growth of digital lending depends on consumer trust rather than aggressive recovery.
Rules exist, but complaints continue
The Reserve Bank of India has introduced Digital Lending Directions requiring clearer disclosures, cooling-off periods and stronger grievance mechanisms for borrowers.
However, complaints against digital lenders continue.
Mehra said digital lending has the potential to improve financial inclusion but warned that poor recovery practices could undermine that progress.
He said, "Digital lending has the potential to strengthen financial inclusion, but that promise is undermined when borrowers face harassment, privacy violations and exploitative lending practices." He added, "Stronger action against illegal lenders, greater borrower awareness and stricter accountability are now essential."
Shekhawat said consumer protection and financial inclusion should go hand in hand, adding, "Responsible innovation, transparent pricing, secure data practices and better financial literacy are the way forward."
Borrowers have legal rights
Borrowers who miss repayments still have legal protections.
Recovery agents cannot legally threaten, abuse or publicly shame borrowers. They also cannot impersonate police officers or courts.
If personal data is misused or borrowers face intimidation, complaints can be made to the lender, escalated to the RBI Ombudsman and, in cases involving data misuse or criminal intimidation, reported to cybercrime authorities.
A missed EMI is a civil matter, not a criminal offence.
The challenge ahead
Digital lending has helped students pay education fees, entrepreneurs start businesses and families deal with emergencies without lengthy paperwork.
But as the sector continues to grow, the challenge will be ensuring borrowers are treated fairly when they face financial difficulties.
For many borrowers, the biggest concern is no longer how quickly they can get a loan. It is whether missing a single EMI could expose them to harassment, intimidation and a cycle of debt.
A single missed EMI is leaving some digital loan borrowers facing repeated calls, threats and growing stress, raising concerns over recovery practices as India's digital lending market continues to expand.
Digital lending has made borrowing quicker and easier for millions of Indians, with loans often approved within minutes. But while access to credit has improved, some borrowers say aggressive recovery tactics, high interest rates and concerns over personal data are turning short-term financial help into long-term distress.
Quick loan, growing pressure
For many people, digital lending apps offer a quick solution during emergencies. But for some borrowers, the problems begin when they are unable to repay on time.
Don't Miss: ₹2–2.5 crore for a 2BHK? Delhi resident's reddit post sparks housing affordability debate
A 28-year-old woman from Delhi, who did not wish to be named, told India Today that she borrowed ₹1 lakh through a digital lending app after losing her job during a company restructuring. She said the money reached her account within minutes and added, "The money came within minutes. I thought I'd repay it after finding another job."
She could not repay the loan on time.
According to her, recovery agents initially called once or twice a day. Within a week, the calls became relentless, sometimes every hour. She said they warned that her employer and family would be informed if she failed to repay. Unable to cope with the pressure, she borrowed money from a friend and cleared the loan.
She said the repeated calls were more difficult than the loan itself, adding, "The loan wasn't the worst part. The fear was."
Most distressed borrowers reported harassment
An internal survey by Expert Panel, a firm that provides legal support for loan resolution and protection from financial harassment, surveyed 10,000 distressed borrowers.
The survey found that:
- Nearly 72% said they had experienced harassment by recovery agents.
- Around 67% reported repeated calls from multiple numbers.
- 11% said recovery agents visited their homes or workplaces.
- 8% received threats of legal action.
Young Indians are driving digital lending
The survey found younger borrowers account for a large share of digital loan users.
It said Gen Z makes up 41% of first-time borrowers, with nearly 46% taking loans to buy smartphones, laptops and other gadgets.
Millennials account for around 45% of personal loan borrowers, often borrowing for lifestyle expenses, home improvements or to start small businesses.
The survey said digital lending has widened access to credit, particularly for people who may not qualify for traditional bank loans. However, it also found that borrowing has become easier than understanding the risks involved.
Concerns over access to personal data
Many digital lending apps ask users to allow access to contacts, photos and media files before approving loans.
Anurag Mehra, Director of Expert Panel, said borrowers should be cautious if a lending app asks for such permissions.
He said, "The biggest red flag is any app asking for access to your contacts or personal media as a condition for granting a loan." He added, "That's not required for lending. It's data collection for leverage."
Mehra said borrowers should also be careful of apps charging unusually high processing fees, offering repayment periods of just one or two weeks, or charging annual interest rates above 25%.
He advised borrowers to check whether the lender is backed by an RBI-regulated bank or NBFC before downloading the app.
A cycle of borrowing
For some borrowers, one loan leads to another.
A delivery executive from Delhi-NCR borrowed ₹1 lakh to repair his motorcycle after an accident and meet other expenses. The repayment period was three months.
When he could not repay the loan, he took another digital loan to settle the first. He eventually found himself repaying three different lenders.
He said he was no longer borrowing because he needed money, adding, "I wasn't borrowing because I needed money anymore. I was borrowing just to keep up with repayments."
The survey found that while banks generally charge interest rates between 10% and 20%, around 45% of digital loan users paid annual interest rates above 25%.
It also said some unregulated lenders charge effective annualised interest rates running into several hundred per cent, making repayment extremely difficult. Hidden processing charges and unclear loan terms can add to the burden.
'Consumer trust is key'
Shakti Shekhawat, Business Head at BharatLoan, said the emotional impact of aggressive recovery practices is often overlooked.
He said, "Repeated calls, public shaming or involving family members and employers can create anxiety, emotional distress and reputational concerns."
Shekhawat said collections should be handled with empathy and transparency, adding that the long-term growth of digital lending depends on consumer trust rather than aggressive recovery.
Rules exist, but complaints continue
The Reserve Bank of India has introduced Digital Lending Directions requiring clearer disclosures, cooling-off periods and stronger grievance mechanisms for borrowers.
However, complaints against digital lenders continue.
Mehra said digital lending has the potential to improve financial inclusion but warned that poor recovery practices could undermine that progress.
He said, "Digital lending has the potential to strengthen financial inclusion, but that promise is undermined when borrowers face harassment, privacy violations and exploitative lending practices." He added, "Stronger action against illegal lenders, greater borrower awareness and stricter accountability are now essential."
Shekhawat said consumer protection and financial inclusion should go hand in hand, adding, "Responsible innovation, transparent pricing, secure data practices and better financial literacy are the way forward."
Borrowers have legal rights
Borrowers who miss repayments still have legal protections.
Recovery agents cannot legally threaten, abuse or publicly shame borrowers. They also cannot impersonate police officers or courts.
If personal data is misused or borrowers face intimidation, complaints can be made to the lender, escalated to the RBI Ombudsman and, in cases involving data misuse or criminal intimidation, reported to cybercrime authorities.
A missed EMI is a civil matter, not a criminal offence.
The challenge ahead
Digital lending has helped students pay education fees, entrepreneurs start businesses and families deal with emergencies without lengthy paperwork.
But as the sector continues to grow, the challenge will be ensuring borrowers are treated fairly when they face financial difficulties.
For many borrowers, the biggest concern is no longer how quickly they can get a loan. It is whether missing a single EMI could expose them to harassment, intimidation and a cycle of debt.