Defaults are the single biggest threat to a device-financing book. The good news: most of them are preventable with the right process. Here are seven strategies that NBFCs and dealers use to keep EMI defaults low — without resorting to heavy-handed collections.
1. Tighten onboarding, not just underwriting
Many defaults trace back to onboarding gaps — wrong contact numbers, unverified addresses, or borrowers who never understood the repayment schedule. Capturing clean data and clearly explaining EMI terms at the point of sale prevents a surprising share of later delinquency.
2. Automate reminders across channels
A large portion of missed EMIs are simply forgotten. Automated reminders by SMS, WhatsApp and in-app notifications — before the due date and on it — recover many accounts before they ever become a collections problem.
3. Use graduated device security
For financed devices, EMI-linked device locking gives borrowers a strong, immediate reason to pay while keeping the process consistent and humane. Graduated restrictions — reminders, then a lock screen, then a soft-lock — let most borrowers self-cure before deep delinquency sets in.
4. Make paying effortless
Every extra step between intent and payment costs you recoveries. A one-tap payment link on the reminder and on the lock screen, with multiple payment options, removes friction at exactly the moment a borrower is ready to pay.
5. Segment your portfolio
- Treat first-time minor delinquents very differently from repeat or deep-delinquent accounts.
- Prioritise field effort on the small number of accounts that genuinely need it.
- Let automation handle the long tail of low-risk, forgetful borrowers.
6. Act on data, not gut feel
A real-time analytics dashboard tells you which dealers, products and cohorts default most, and which interventions actually work. Measuring roll rates and cure rates lets you double down on what is effective and stop wasting effort on what is not.
7. Keep the borrower relationship intact
Aggressive collections damage your brand and rarely improve recovery. A consistent, transparent, technology-led process recovers more over the life of the book and keeps borrowers willing to finance with you again.
Bringing it together with Kredsure
Kredsure unifies reminders, EMI-linked device security and portfolio analytics in a single platform, so lenders and dealers can apply all seven strategies without stitching together multiple tools. The outcome is fewer defaults, lower collection costs and a healthier financing book.