Loan Default Is Not The End!

By BankBazaar | October 4, 2017

Loan Default Is Not The End

“Oops! I did it again. I failed to repay. Now I am lost in the game…Oh baby, baby!”

Now that’s one song which every loan defaulter can relate to. Repaying a loan and keeping up with the EMIs can be quite an uphill task. It’s possible to tumble and fall into a spiral of debt from defaulting on your loan. This can be quite worrying and you’re probably wondering what the consequences will be. Well, while defaulting on a loan repayment is certainly something you should avoid, it is not the end of the world and won’t brand you as a criminal.

If you are worried sick about having defaulted on your loan, we have something that we hope will make you feel a little better. There are certain rights which have been established to safeguard the interest of loan defaulters. Read on to know what these are.

Let’s begin. It’s important to know that banks have a provision for restructuring the loan. There are various ways to do this depending on the type of loan you have taken. However, one common method would be extending the tenure of the loan. What happens here is that with the extension of your loan tenure, your EMIs become smaller and therefore, easier for you to manage. However, the bank must perceive the reason of default to be genuine before they do any kind of restructuring. The Reserve Bank of India (RBI) has issued guidelines for this. For example, the loan tenure can be increased by not more than a year in most cases. Foreclosure by selling the collateral with the borrower’s co-operation is also advised as the next step.

Does a default mean that you need to give up ownership of the asset for which the loan was taken?

Owning a house or a car is a dream come true for many because of the easy availability of loans. In the last few years with an increase in the standard of living particularly in the metros, the once conservative and loan-averse investor is now willing to take on loan commitments to satisfy even leisure requirements. However, if you find that you are in a situation where you will not be able to meet your loan obligations, what do you do?

Running away from the lender is not an option. Banks/lending institutions understand that there could be genuine reasons because of which the borrower is unable to make timely payments. For e.g. the loss of a job, or an accident that may have confined the borrower to his / her bed. Banks are more likely to consider your situation if you have always paid your EMIs on time before the things took an unfortunate turn. Based on how genuine your intent and case is, the bank may look for various feasible solutions that are mutually acceptable. The borrower will benefit because he will be able to retain his asset and the bank will also benefit because this agreement will prevent an addition to its non-performing asset (NPA) portfolio.

The various options that can be worked out include:

  • Rescheduling your debt: After having analysed your financial position, if the bank feels that the quantum of the EMI is what is troubling you, they may be willing to reschedule your debt by extending the loan tenure. That will bring down the monthly EMI commitment, though it will mean more interest outgo in the long-term. However, you should consider the immediate relief it can bring to your current situation. When the tide turns and you are facing better times you can try negotiating with your bank and revert to your old or higher EMI or even prepay your loan. Closing your loan early can help to save excessive interest outgo as long as the bank doesn’t levy a heavy prepayment penalty.

Check This: Should you invest or prepay your loan?

  • Deferring the payment: If your financial situation is such that there is likely to be a jump in cash flow going forward because of a change in job or any other reason, you may seek temporary relief from the bank for a few months. The bank may permit the same but may charge a penalty for not paying within the time frame agreed upon earlier.
  • One-time settlement: If you express your desire to pay back and notify the bank about your current financial condition, banks may be willing to give you the option of a one-time settlement. Please note that this will be done on a case-to-case basis. This is a good way to get rid of your loan if you have some money. Usually the settlement amount lower than the original amount you would have had to pay. i.e. the bank may waive off some amount or charges. If your financial situation is really bad, then you may need to file for bankruptcy to free yourself from the loan commitment.
  • Conversion of the loan in case of unsecured loans: Banks tend to be stricter as far as unsecured loans are concerned. The borrower could opt for converting the unsecured loan to a secured one by offering a security. This will bring down the rate of interest and thus the EMI burden.

Running away from the problem is not the solution. Not only will you undergo emotional stress, you will also end up losing your asset. Remember, your intent to pay off the loan should be evident to the lender. So be wise and talk to the bank representative the moment you realise that you will not be able to meet your obligations. Never wait till things get really bad.

What happens if none of the above options work out?

If none of the above options work, after giving you time to repay your dues, the bank will take the next step which is repossession of the asset (in the case of a secured loan). Here’s what will happen.

Movable Asset (Car/Auto)

  • The borrower will be given a notice of 7-15 days to pay the dues before the repossession of the vehicle takes place. In case of non-payment within this notice period, the bank will repossess the pledged vehicle.
  • After repossession of the vehicle, a pre-sale notice will be issued to the borrower giving him seven days to pay the outstanding dues. The pre-sale notice will clearly mention the details of the concerned office and the corresponding contact person for payment and release of the vehicle.
  • In case the borrower makes the payment in accordance with the agreed terms of a settlement, the vehicle will be released back to the borrower within seven days from the realisation of the payment.
  • If the borrower does not manage to make the payment, it will be sold through an auction through dealers impanelled with the bank within 90 days from the date of repossession.

Additional Reading: When A Borrower Fails To Repay The Loan!

Immovable Asset (House/Property/Land)

  • A notice will be sent to the borrower u/s 13(2) of the SARFAESI Act. This can be done only after the loan is classified as an NPA as per the guidelines set by the RBI.
  • The customer will be allowed 60 days, post issuance of the notice, to regularise the account or come forward to settle the account.
  • If the borrower refuses to pay, then the authorised officer will ask for the physical possession of the mortgaged property by handing over the demand possession notice to the borrower.
  • The bank shall proceed with the auction of the attached property after 30 days of taking possession of the property. This is in the event, that the customer does not come forward and settle the loan. The bank shall send the customer a letter intimating him about the venue of the sale, indicating date and time of the same.
  • The bank will consider handing over the possession of the property to the borrower any time after repossession and before concluding the sale transaction of the property, provided the bank dues are cleared in full.

Any excess amount obtained, after adjusting the dues on the loan, will be refunded to the borrower.

Additional Reading: Home Loan default – How to handle one

The Rights of the Borrower

The SARFAESI act gives the customer the right to appeal against the action of repossession taken by the bank in the Debt Recovery Tribunal u/s 17 within 45 days from the date when the action was taken. If the DRT passes an order against the borrower, then an appeal can be filed before the Appellate Tribunal within 30 days of receiving it. If it is held in the appeal that the possession of the asset taken by the secured creditor was wrongful, the Tribunal or the Appellate Tribunal may direct its return to the borrower, along with appropriate compensation and cost.

You can exercise the following rights if you default on a loan:

Right to Notice

When you fail to pay the loan dues, the bank can’t take any immediate action against you. If you haven’t paid EMIs for 90 days, the bank must serve you a notice of 60 days. Once the notice period is over and if the dues are still unsettled, then the bank is allowed to repossess your property. And before the bank can sell off your property, it has to serve yet another notice of one month informing you about the same.

Right to be Heard

Within the one month notice period, before the property is auctioned, a loan defaulter can file a representation to the authorities and raise objections towards selling off the property. The loan officer has to then respond to the representation and give valid reasons for turning down your objections within seven days.

Right to Fair Value

If the bank has repossessed your property due to a loan default, it does not give them the sole right to decide the sale price of the property. Along with the one month notice informing the customer about the auction of the property, the bank has to send a fair value notice that clearly states the sale price of the property as assessed by the bank officials. However, if you feel that the bank is selling it off at an under-priced rate, then you can raise objections and declare a price that you feel is reasonable. The bank has to consider your plea to receive fair value for your property and will have to revaluate the property once again.

Right to Balance

Since the rates of property are steeply rising with each passing day, there is a possibility that there might be a fair amount of balance left after the bank has settled the loan by selling off your property. You are entitled to get that balance amount as the bank has no claim on it once the loan is settled.

Right to be Treated Politely

Banks are registered organisations and can’t act like independent money lenders when it comes to a loan default. In the past there have been reports of harassment and mistreatment of loan defaulters by collection agents but now banks have decided to follow a code of conduct that is polite and respectful. A collection officer has to politely request to meet you and the place and time of the meeting can be as per your convenience. If you don’t respond to the request, the collection officer may meet you at your home or work place. Also, the agent can meet you only between 7 AM and 7 PM and can’t harass you late at night or in the wee hours of morning. The collection agents are supposed to treat the defaulters in a respectful manner without resorting to abusive language and mistreatment.

The Consequences

Loan default can have serious consequences. Not only could it result in the seizure and auction of your assets, but your Credit Score too, will go for a toss. Even rescheduling debt tarnishes your credit history to an extent and will reflect in your credit report. Obtaining a loan in the future will become an issue which is a huge financial setback. Make sure you take a loan only if you’re sure you will be able to make timely repayments. A good way to do this is to ascertain your personal net worth in terms of assets you own and the money you have at your disposal after taking stock of your existing debts and other financial commitments.

Also, if you ever default a loan payment, do not panic and remember to exercise the above mentioned rights. Check out the best deals on Home Loans, Car Loans and Personal Loans!

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.

119 thoughts on “Loan Default Is Not The End!

  1. BASUDEV BEHERA

    I was working in financial sector since last 5 years.as i feel incase of secured loanns we should reposses the asset atearliest.if we feel that customers is willfull we should reposses the asset soon.RBI should make mandatory for all NBFC they should go for CIBIL check before funding.if all financers are cooprerate and they should publish their default customer in leading newspaper the defaulter will be minimise to some extent.

    Reply
    1. Ram

      u speak as if you are a lender just working in the financial sector does not make you a NBFC or a bank.no one defaults on loan wantedly,many a times it is unforeseen emergency,agree few default. Moreover CIBIL is already in place for most banks and institutions.newspapers pages won't be enough to publish defaulter names.defaming someone is not a right idea,i think u still live in some stone age culture.2008 was one of the worst times, hope there are less defaulters ahead.good luck india.

      Reply
  2. mukund kumar advocate

    please give me suggestion which that a loan case from bank but borrower paid to loan and guarantor is dead however
    loan deduct is going on and rest tow parties also borrower with him . what is the remady and staertd case and relief of this condition

    Reply
    1. Team BankBazaar

      Hi Mukund,

      For any grievances regarding your loan, you can write to the bank or contact the Banking Ombudsman.

      Cheers,
      Team BankBazaar

      Reply
  3. m f shaikh

    i had home of 8 lac rs but i want to leave job but want pay emi continue by other source is that possible ?

    Reply
    1. Team BankBazaar

      Hi Shaikh,

      As long as the account from which the EMI is debited continues to have enough funds to finance the EMI, it should be all right. You just need to make sure that the account which is linked to your Home Loan is topped up with cash from your other source of income. This way, you will avoid missing any EMI.

      Cheers,
      Team BankBazaar

      Reply
  4. Dk

    I am having a personal loan from HDFC , i had paid emi of personal loan for 6 months properly (auto debit), but i lost job for which i was not able to pay emi for 3 months i received a notice from bank that my credit facility has been withdrawn and repay the total loan amount immediately by 7 days, otherwise bank’s authorised person will posses my assets. Please advie what to do, I am not i a condition to repay the total amount, i can pay 1 or two emi max,

    Reply
    1. Team BankBazaar

      Hi Dk,

      Talk to your bank and explain the situation. Try to rework the loan terms with them. Some banks agree to a one-time settlement. Check this article to understand what your options are – Loan Default Is Not The End!

      Cheers,
      Team BankBazaar

      Reply
  5. shsjewellers@gmail.com

    I having a personal loans from nbfc companies. I got big loss in my buissness.
    So I am not able to pay balance emis. Because my all investment is sinked. I also borrow loan on
    My house.but my Friend is ready to pay my secured loan which borrowed on my house.
    What can I do. What will happened in future. I am worried about my future. Pls suggest me what can I do .

    Reply
    1. Team BankBazaar

      Hi Shsjewellers,

      Talk to your bank and find out if they will agree to a one-time settlement. However, if you are still earning money, the bank might not agree to such a settlement. In that case, ask them for extra time to repay the loan.

      Cheers,
      Team BankBazaar

      Reply
  6. Debjyoti Das

    After getting declared NPA can the borrower after clearing the dues gets the NPA status removed?

    Reply
    1. Team BankBazaar

      Hi Debjyoti,

      It is possible to have the NPA status removed. You will need to talk to your bank to see that it is done.

      Cheers,
      Team BankBazaar

      Reply
  7. munaf

    Hi,

    i had personal load with ABN AMRO bank 10 years back and paid 6 months EMI and then i had cleared full amount but i did not pay pre-closure charges of around 6000 rupees.

    2 days back i got call stating asst.commissioner of police from hubli, stating there is arrest warrant for not paying dues of Rs.80,000. i had mentioned i have already paid but he said there is no NOC from your side for Clarence of loan. me currently not in country they are asking me to talk to the lawyer who filed case against me.
    kindly help me with the next step

    regards,
    munaf

    Reply
    1. Team BankBazaar

      Hi Munaf,

      We would love to help you but due to the very specific nature of your problem, we suggest that you get legal help to sort this out.


      Team BankBazaar

      Reply
  8. robin

    i have taken ahome loan from icici bank. there are two things going on.
    1. the flat is still to be given the possession, means the builder failed to deliver the flat on the agreed time.
    2. i have lost my job and i am jobless from the past 6 months, i am trying hard to get the job but i am unable to get a job which can pay the emi.
    now i just want to get rid of the situation, i want to end this at all. i want to surrender and i know that this will down the credit history and i will be unable to get any type of loan in future but i am ready for this.
    i want t o surrender the property and feared of the thing that bank have my security cheque. whether bank will try to cash those cheques even after surrender of the property.

    Reply
    1. Team BankBazaar

      Hi Robin,

      Once you surrender the property and the settlement has been made to the bank, the bank will return all the post dated cheques you gave them. Talk to your bank to clear up any concerns you might have.

      Cheers,
      Team BankBazaar

      Reply
  9. Naveen Kumar S

    Hi,
    I had taken a loan from ICICI and Barclays bank, since there was recession in 2008 i lost my job and unable pay my loan. There after some how i managed to clear with Barclays with one time settlement. And again same was done with ICICI but still i get a call from ICICI third party members that i have due amout. But i have settlement copy of it in ICICI letter head. Now the issue is how do i get rid of this. When i checked my CIBIL is around 618 but the it shows Barclays bank “written OFF” as “Settled” Kindly help me on how do i get it removed from CIBIL so that i can get a loan in future.

    Awaiting for your valuable feedback.

    Thanks
    Naveen

    Reply
    1. Team BankBazaar

      Hi Naveen,

      You can contact CIBIL with the copy of your settlement letter. They should be able to help you by updating your credit information. You could also try talking to ICICI bank to let them know that you are still receiving calls. Check this link to know how to correct errors on your CIBIL report.

      Cheers,
      Team BankBazaar

      Reply
  10. shashi kumar

    I have taken loan about 8 years back paid for 15 months and defaulted due to financial issue and could not continue to make payments. after 8 years I got call from collection agency and asking to settle for the principle amount that is currently due. but I dont have that much of money to pay.what are my options

    Reply
    1. Team BankBazaar

      Hi Shashi,

      Please talk to the bank and explain your financial situation. You can ask them for an one-time settlement. If they don’t agree to this, you can ask for a tenure extension.

      Cheers,
      Team BankBazaar

      Reply
  11. Arnab

    Hi,
    I had taken personal loans and loans on credit cards. Total amount outstanding is approx 25 lakhs, and the EMI amounts have become double of my income due to improper planning. My net take home is 60k, and the EMI amount has become 1.2 lakhs, and I am in no position to pay all the EMIs. I have no assets to take a secured loan. I asked banks to restructure my loan for long term but they are saying that they don’t have any such provisions. What can I do now?

    Reply
    1. Team BankBazaar

      Hi Arnab,

      Talk to the bank to consolidate your debt instead of restructuring. Explain your financial situation to them and check if you can get a tenure extension.

      Cheers,
      Team BankBazaar

      Reply
      1. Arnab

        The banks are saying that I already have twice of the required exposure. Also, they are not ready to consolidate or restructure. What to do?

        Reply
        1. Team BankBazaar

          Hi Arnab, You could try to get a loan against any of your assets to settle your debts. Talk to your bank to see how you can take things forward.

          Cheers,
          Team BankBazaar

          Reply
          1. Arnab

            I do not have any assets like gold, property, shares, etc to take loan by giving collateral. If I had, I would have done it till now. What are the options in my hand? Please help.

          2. Team BankBazaar

            Hi Arnab,

            You could try talking to your bank for a one-time settlement or ask for a tenure extension. If nothing works, we suggest that you approach your legal counsel for help.

            Cheers,
            Team BankBazaar

    2. Unknown

      Hi Arnab,

      Did you got any help on this? Because I too have the same situation right now. Please do let me know if you found any solution for this.

      Reply
      1. Team BankBazaar

        Hi there,

        Can you please let us know how we can help you?

        Cheers,
        Team BankBazaar

        Reply
  12. vicky Raj

    i have taken loan and last six months not paid emi because I was sick and lost of my job. I want to settled that. Before settled can I get the job in any bank? Please guide me.

    Reply
    1. Team BankBazaar

      Hi Vicky, If you want to work in a bank, it is better for you to settle the loan as banks sometimes look at your Credit Report before recruiting you. Your loan default will reflect on your Credit Report and might make it tough for you to land that job.

      Cheers,
      Team BankBazaar

      Reply
  13. Vikram Raj

    Sir I have taken PL. I paid six emi only and nptpaying for last six months. Because I have lost job and till now I am unemployed. Can I do the job in any banking or finance sector? Please help me what I should do?

    Reply
    1. Team BankBazaar

      Hi Vikram, Loan defaults might be an issue for you if you want to join a finance firm. Banks and financial institutions usually look at your Credit Score of an applicant before granting them a job. We suggest that you clear your loan before applying to lower the chances of rejection. Try asking your bank for tenure extension for your loan.

      Cheers,
      Team BankBazaar

      Reply
  14. Dr.shrutidabi

    I my oneof family member took education loan in 2009 for studying merchant Navy course from Pondicherry by default he is not able to get settled in that job so presently working as a hotel manager . Till now he is paying for his loan n loan which he has to pay is 2lakh (e.m.i. Everything including) . But sir his family is not rich enough to pay this also yet n presently bank had took an action against him now he had a lawer cause he had to go to court every month . Sir is there anyway to settle this loan as he had taken education loan not home loan or car loan… Please guide us

    Reply
    1. Team BankBazaar

      Hi Shrutidabi,

      We suggest that your family member talk to the bank and ask for a tenure extension or an EMI holiday. If he has enough money, he can ask for an one-time settlement. It might be less cumbersome to talk to the bank rather than going the legal way.

      Cheers,
      Team BankBazaar

      Reply
  15. Keshav

    I have pledged my jewels worth Rs 1 lakh and got a loan of Rs 30000/. I failed to repay the jewel loan. In the meantime, the bank shifted its premises and in that process it lost the jewels packet pledged by me. The bank went to court to recover the dues. Please discuss what could be the decree.

    Reply
    1. Team BankBazaar

      Hi Keshav, The bank takes collateral so that they can use it in case of a default. Since you didn;t repay, the bank will have to use the jewels to recover the loan amount. We suggest that you get legal counsel to understand how you can resolve this.

      Reply
  16. vishwas

    r/sir
    i took education loan in 2009 for b.tech course from bank of india. I completed b.tech in 2013 with 81% marks but did not get a job in market.so,i opted to move towards banking sector job.recently i cleared sbi clerk exam,now i paid the whole amount through one time settlement on 29/11/2016.One thing is mentioned in sbi notification that is we disqualify loan defaulters during document verification.i wan to know”will they disqualify me or not?”

    Reply
    1. Team BankBazaar

      Hi Vishwas,

      A good Credit Score is important for some professions. Since you are considering joining the banking industry, they may factor in your credit history and repayment capacity on loans. A One-Time Settlement, though not a default will reflect on your credit report. The job offer will ultimately be at the discretion of the bank.

      Reply
  17. rishabh srivastava

    I have a housing loan which Is declared NPA. Can I get a Education Loan keeping that as a colleteral?

    Reply
    1. Team BankBazaar

      Hi Rishabh, It may not be possible to use your house to get another loan as the housing loan on it has been declared as a NPA.

      Reply
  18. Vinoth

    One of my ex colleagues has forced me to apply for 2 personal loans from Axis(Rs.385000) and HDFC (Rs.1,25000) and 3 credit cards to do a business. Apart from that I have Home loan on my own. Paying Rs.4500 emi per month.

    Initially he was helping me with the EMIS and bills but now stopped giving me the amount. Because of which I’m defaulting axis bank emi for 5 months and 3 credit card bulls.

    My bank is not givving me other options like emi reduction. What should I do mange my EMIs ? (3 ccs with Rs.85k, 45k &55k outstanding, one home loan 3 lks. And 2 PLsof 3.85 lks from axis&1.25 lks HDFC. salary: 25k)?

    EMI’s per month:
    Axis PL – 10,700
    HDFC PL – 3322
    Home loan – 4500
    3 credit card bills – 184000

    How can I negotiate with my bank to pay the EMI according to my income?

    My income: Rs.25k

    Reply
    1. Team BankBazaar

      Hi Vinoth, You will need to explain your situation to the respective banks. They’ll be able to help you with your situation. If you are still unable to sort this out, we suggest that you get legal counsel or contact a financial advisor. Cheers, Team BankBazaar

      Reply
  19. Sridhar

    Hello Team,
    i have 3 credit cards and 2 loans and was using credit cards since 2009, and i was a prompt payer untill 2016 with a CIBIL of 810 but now my finances has turned upside down due to which i am unable to pay any of the bills ,

    please suggest me with any option to pay off the existing debits as this has become a torchure emotionally and mentally

    Reply
    1. Team BankBazaar

      Hi Sridhar, Try explaining your situation to your lenders. They’ll might be able to help you with with a plan to pay of your debt. Read this article for some more tips on managing your debt. Cheers, Team BankBazaar

      Reply
  20. narayana rao

    The dharnas by the bankers to recover the dues from defaulters , is it legally allowed.

    Reply
    1. Team BankBazaar

      Hi Narayana,
      Banks can sell the asset attached to a loan to recover the loan amount. However, threatening customers is against the law. If you feel that you are being treated unfairly when you have genuine reasons not to repay a loan, please get legal counsel.
      Cheers,
      Team BankBazaar

      Reply
  21. Sabari

    I bought a education loan in SBI in 2009-2013(Rs.3,45000) as a joint account with my father. Due to default my account changed to NPA & handed over to Relaiance ARC. Shall my father is eligible for getting Personal/Housing loan now…?

    What will be the impact of CIBIL Score in it…

    Reply
    1. Team BankBazaar

      Hi Sabari,

      Defaults do affect one’s Credit Score. We suggest that you ask your father to get his Credit Report before applying for any loan.

      Cheers,
      Team BankBazaar

      Reply
  22. Harpal singh Bassan

    Hi,
    i had booked a flat in Hiranandani palace gardens , panvel in 2009 , possession of which was promised in 2012.

    I had procured a loan from M/s Axis bank and had been paying regular instalments till nov 16. Since the builder has failed to deliver as yet and there is no indication of it happening in the next 2-3 years, I have been unable to keep up with the monthly emi.

    95% of the total amount has been released to the builder by the bank. I have requested the bank to give me a moratarium from the monthly payments till the time the posession has been received, as the bank is also responsible by not being diligent in checking the status of the project.

    I have since received a notice from the bank declaring the asset as npa.

    Can you please advise me on my options.,

    Thank you.

    Reply
    1. Team BankBazaar

      Hi Harpal Singh Bassan,
      You could try contacting other buyers and speak to the builder as well regarding this. We suggest that you consider getting legal counsel as well to sort this out.
      Cheers,
      Team BankBazaar

      Reply
  23. Jnanesh

    I have personal loan from HDFC which is four lakhs, credit card from HDFC which is not paid and now the amount is around
    1,60,000. Also one of the credit card from Indus Ind which amounts to 1,40,000. I have loan from peer to peer lending website
    which is 4 lakhs. I have education loan, loan from relatives, friends and colleagues. The total loan amount might come up to 25 lakhs. I am in no position to pay all of them in near future. I want to clear loans taken from relatives, friends and colleagues first as I have to live among them. What can I do in my current situation? Can I declare bankruptcy? I just want to get rid of this mental stress I am going through. I am just 23 and I am in deep shit because of some hasty decisions. Please help me. Can I declare bankruptcy even if I have a job?

    Reply
    1. Team BankBazaar

      Hi Jnanesh,

      We are very sorry about your situation.
      While we do provide general tips and advice on personal finance, we will not be able to provide guidance on specific queries. We would love to help but due to the specific nature of your question, we suggest that you get legal counsel or consult your financial advisor to sort this out.
      Good Luck.

      Cheers,
      Team BankBazaar

      Reply
  24. skumar

    Hi..Can i Voluntary surrender a property to bank as unable to repay home loan against it ? Whats the process ? will that avoid legal process..? Thanks in advance!

    Reply
    1. Team BankBazaar

      Hi skumar,
      It is possible to ask your bank to take possession of the property for which you got a Home Loan. However, talk to your bank and explain to them about your financial situation. They might be able to provide a better solution.

      Cheers,
      Team BankBazaar

      Reply
  25. naresh

    I have loan for 3lacs but now bank is coming for 1 time settlement. it is ok for me but i dont have the money to pay. i have land which trying to sell and settle. but bank people are pressing for settlement i told them i will pay emis further and settle once my land disposed. but they are not accepting what to do?

    Reply
    1. Team BankBazaar

      Hi Naresh,

      You will have to tell the bank that nothing can be done unless you liquidate your asset (in this case your land). And if you think the bank is being unreasonable, then you’d better seek legal counsel to deal with them.

      Cheers,
      Team BankBazaar

      Reply
  26. David

    We have a term house loan from sbi . For the past 2 years we paid the emi without any issue . Now due to heavy money crisis i stopped paying the emi and now it/s 6 months . Now the bank sent a legal notice to us . Now i am ready to pay the past 6 month emi but the bank refuse to accept my amount they asked me to pay the full settlement or else they said they are going to auction . What should i do ? Any advice please .

    Reply
    1. Team BankBazaar

      Hi David,

      Try talking to your bank and explain your financial situation. You could write to the bank headquarters too. If nothing works, we suggest that you contact your legal counsel for help.
      Cheers,
      Team BankBazaar

      Reply
  27. Sumant Mishra

    Hi!

    I took a home loan on a property from axis bank. I’m unable to pay my emi. I’m ready to give away my property to the bank for auction. What will happen if the auctioned value is less than the amount I owe to the bank? Can the bank come after my other assets(bank account, other property, etc) that were not attached with this loan?

    Reply
    1. Team BankBazaar

      Hi Sumant Mishra,

      Unfortunately, that is a possibility. If the loan amount of the bank is not fully satisfied through the sale proceeds of your mortgaged property, the bank can file an application before the Debt Recovery Tribunal having jurisdiction or a competent Court, as the case may be, for the recovery of the balance amount. This may include attachment of your other assets as well. We recommend you to contact a lawyer for an expert opinion on the matter.

      Cheers,
      Team BankBazaar

      Reply
  28. Vinay

    Dear Sir/Madam,

    I have been laid off by my company in May 2016, since then I am either in bad luck or whatever you have to say. I have not been able to get a job at all…I have tried all kinds of things including trying to setup my own business, but in vain, I am right now jobless for more than a year, after working for 10 years its like a stand still.

    Anyways that’s way too personal, the reason I am writing this is I had taken a personal loan from HDFC bank for 1.8 lakhs, Outstanding loan amount is 1,10,000/-. HDFC Credit Card Outstanding amount of Rs.28,000/-.
    After my job lay off, I was in no position, family deserted me, etc..I did not contact the bank or pay any EMI’s…. I got a call from a Legal person a few weeks back asking me to pay the same at any cost. I have no job for the past more than 11 Months, no person or family supporting me. How will I ever repay the amounts, I agree after getting a job I will surely repay the amounts one by one. Can you suggest me what to do ?.
    I need at least 2 years time for settlement.
    In short I am in no position to pay any amount what so ever, U cant imagine how I am surviving.
    I dont have any assets also…I have heard that there is a way to stop the loan and repay once I get a job. Do let me know those details.

    Reply
    1. Team BankBazaar

      Hi Vinay,
      Really sorry to hear about your situation. We hope things look up for you soon – we’re keeping our fingers crossed. For the time being, here’s what you can do.

      You can either approach the banking ombudsman to get extra time for repayment of the loans or get help from your legal counsel. Try these if your bank refuses to give you more time to repay your loans. However, you need to write to your bank’s headquarters before you try them.

      All the best!

      Cheers,
      Team BankBazaar

      Reply
  29. nabab

    Sir I hv taken a personal loan of 2 lakh from icici bank eight month ago for five years tenure. I regularly paid emi eight month . But now I lost my job for my serious health issue. I m just 23. My family condition is so poor.. now I m unable to pay emi … please give me solution…..

    Reply
    1. Team BankBazaar

      Hi nabab,
      You can either approach the banking ombudsman for getting extra time for repayment of the loans or get help from your legal counsel. Try these if your bank refuses to give you more time to repay your loans. However, you need to write to your bank’s headquarters before you try them.
      Cheers,
      Team BankBazaar

      Reply
  30. Arun

    I have late on my credit card and consumer loans , since last more than a year i am not paying , just wanted to ask if i will pay all my outstanding after how much time my cibill scores will be good to apply for a credit card or personal loan . Note i will be paying full amount with interest and all

    Reply
    1. Team BankBazaar

      Hi Arun,

      Your Cibil score gets updated on a monthly basis. You will be able to see the score after a month when you’ve paid your dues. All the best!

      Cheers,
      Team BankBazaar

      Reply
  31. jay

    Hi,

    I need some advice on this….
    I was using SBI and HDFC credit cards for about 4 years and was paying all dues before time, mostly in one shot. Have never missed on any payments. This was until i lost my job in June 2016. I some how was able to mange until Dec 2016 however, later I was out of any funds in flow and till this day i haven’t been able to find a job. Both SBI and HDFC did give me breathing time until Jan 2017 however, later they started treating me like all time defaulter and some executives have spoken so rudely on call as if the BANK din’t , they lended the money. HDFC kept my saving account on hold and later they debited the funds available in that to my credit card which I had kept to pay off phone bills, baby food and daily living (Not much , it was jusy 9k) .

    It is not like post Jan 2017 I have not paid anything. I have tried to pay a little more than my minimum until May 2017. Now i have no source of income and i have no clue what should i do .. getting a job is my top priority but then all this situiaiton is nerve wrecking my mind. I even tried applying for loan but then it got rejcted due to non payment of credit card bills (CIBIL score was down to 300, where in it used to be 870). If anyone can tip me with me anything they know how to solve this.

    Reply
    1. Team BankBazaar

      Hi jay,

      We’re very sorry about your situation. To straighten things out, we suggest that you put in all your effort into finding a steady and good job ASAP. This should sort out 90% of your problems. Once you have a job in hand, you can then reassimilate your financial capability and start the repayments accordingly. And once this is done your Credit Score will improve gradually.

      All the best!

      Cheers,
      Team BankBazaar

      Reply
  32. Arvind

    I have taken home loan of 12.5 lacs. I continues to pay EMI for 10 months. But now i am facing financial problem. I have job but unable to pay EMI. I want to surrender my assets to SBI bank from where i taken loan. Will the bank take legal action against me if i surrender my asset to it?
    Please suggest.

    Reply
    1. Team BankBazaar

      Hi Arvind,

      You can explain your situation to your bank and tell them that you have them to take over the property as you are unable to pay the EMIs. The bank will tell you about the steps that you need to follow to close the loan account.

      Cheers,
      Team BankBazaar

      Reply
  33. BHARATH KUMAR

    dear bank bazar,

    i appreciate the concern and providing the advice’s to the needy at your best.
    its a really worth doing .

    Can you please sujjest me the CIRCULAR NO. ISSUED BY RBI TO ALL NBFC\S / FI’S/ AFC/ARC AND BANKS THAT NOT TO TRANSFER OR NO ACQUISITIONS / TRANSFERE OF ANY LOAN ACCOUNT OR LOAN OR ASSET WHEN THE SAME IS SUBJUDICE . ( THE DOCTRINE OF LIS PENDENCE ).

    Reply
    1. Team BankBazaar

      Hi Bharath,

      We would love to help you but we do not understand your query. We suggest that you contact your legal counsel for help.

      Cheers,
      Team BankBazaar

      Reply
  34. ganesh

    I’ve witnessed recovery people harass gullible people.
    If the same person gets support of politicians, these people never come back.

    Money is paper what politicians (RBI governor) signs.
    Its a number game.

    Reply
    1. Team BankBazaar

      Hi Ganesh,

      Money is tricky indeed and that’s why you must be careful when you’re spending it. Thanks for sharing your insights.

      Cheers,
      Team BankBazaar

      Reply
  35. shiva kumar gowda

    hi im working hotel industry one of my colleague taken home from bharath bank he not intimated tat he taking our it return for as a guarantor im a second guarantor within one year he bounced two emi but my concern is im going to take home loan how can i withdraw as guarantor im worried tat it effecting my cibil report give me suggestion come out from this situation

    Reply
    1. Team BankBazaar

      Hi shiva kumar gowda,

      It is not possible to make you a guarantor without your signature and consent. Get your credit report to find out whether that loan account is listed in the report. If it is listed, talk to the concerned bank and get your name removed.

      Cheers,
      Team BankBazaar

      Reply
  36. Jay Shankar

    Education loan of Rs 2,05,000 was sanctioned from SBI in 2007 (december) at the rate of 12.75 %. I was not paying it and it was declared NPA. I started paying Rs. 6600 monthly from 2013. In April 2017 I payed all the dues. In total I have payed Rs. 4,80,000 . I have payed interest more than the loan amount. So, is it possible that bank charge huge amount? Bank Authority are telling that it was charged as per interest.

    Reply
    1. Team BankBazaar

      Hi Jay Shankar,

      All loans come with the interest component. Yes, sometimes you do end up repaying heavily because of the interest charged. However, in your case, you may want to check with the bank on late payment and defaulting charges since this loan was declared NPA until 2013. They should be able to give you a split/ break-up for the total amount charged.

      Cheers,
      Team BankBazaar

      Reply
  37. C R Lakshmi Narasimhan

    Hi
    I have been repaying all my EMIs till date. I carry an EMI of Rs.43,000/- (HL-24318/-, PL-11448/-, VL – 6906/-). I have quit my job in August 2016 and ventured into my own business. However i am yet to taste success. I have been paying my EMI regularly till date even though i am not having any income . All these EMIs paid by me are from my Reserves/Savings which i had when i was in employment.
    Now my savings have become fast depleted and still left with some assets like Jewels. Now i am looking into a good job. What will happen if i do not repay my HL EMI for only one month and start repaying from next month. This a mount is now required to pay fees for children education Now i have to decide between paying school fees or defaulting my one month Housing Loan EMI.( I have already made provisions for Full EMI amount of Rs.43,000/-)
    My question is will this one time default affect my CIBIL which is at 860 now?. What is the solution ? Will the Bank take any action?
    Please reply

    Regards

    Reply
    1. Team BankBazaar

      Hi C R Lakshmi Narasimhan,

      Every EMI default will affect your Credit Score. Once you start repaying your loan on time, your Credit Score is sure to imrpove. However the bank might impose late payment fees for the missed EMI. We suggest that you check with your bank for further details.

      Cheers,
      Team BankBazaar

      Reply
      1. C R Lakshmi Narasimhan

        Dear Sir

        Can i defer my HL EMI by one month. Is it possible for the Bank to consider this?

        Regards
        C R Lakshmi Narasimhan

        Reply
        1. Team BankBazaar

          Hi C R Lakshmi Narasimhan,

          This will solely depend on the terms and conditions of the bank you availed your Home Loan from. Please check with them to understand what the procedure is and what the consequences are before doing it.

          Cheers,
          Team BankBazaar

          Reply
  38. Gurumoorthy

    I have taken a two wheeler loan in a pvt finance company in the year 2012. I have paid the dues correctly and i have lost my job and I have to pay only 4 months of my due through ECS. But I paid my due through cash and they gave me a cash voucher for the payment.. When I have to pay the last due they charged for me cheque bounce charges for the last 4 due in the year 2015.. And the pvt company refused my payment and I did not paid my last due amount of Rs. 2257. To pay the balance and to receive NOC I went to the pvt company to close my loan payment they neglected me saying no time, come afterwards and all.. I have went 3 , 4 times to get NOC and pay the balance once they said 7000 and said 10000 to close my account. Yesterday they came to my home to chease my vehicle and they demanding to pay 16700 to close my account.. I just ask them to reduce they are asking me that did i call you for closure.. Who asked you to come? Dont speak with me.. I didn’t compel you to pay.. And so..
    Please help me.. How to face this situation.. for a single due and four cheque bounce charges, whether i have to pay this huge amount..

    Reply
    1. Team BankBazaar

      Hi Gurumoorthy,

      This must be so frustrating for you.

      While we do provide general tips and advice on personal finance, we will not be able to provide guidance on specific queries. We would love to help, but due to the specific nature of your question, we suggest that you get in touch with your legal counsel to sort this out.

      All the best.

      Cheers,
      Team BankBazaar

      Reply
  39. dip

    Hi,
    I took a home loan from hdfc. I have defaulted my home loan. As a result bank took over my asset and declared it as npa. My question is what will happen if bank sells my flat at a price that is less than the outstanding amount.
    Please reply.

    Reply
    1. Team BankBazaar

      Hi Dip,

      The bank sets the selling price of your property after proper assessment by their officials. However, if you feel that the quoted price is lower than your expectation, you can raise an objection. The bank will consider your plea and conduct a re-evaluation of the property.

      Cheers,
      Team BankBazaar

      Reply
  40. Sandeep Agrawal

    I can’t pay EMI of my home loan and Home Loan was 65 Lac then what will happen?

    My builder never provide registry and possession of Flat.

    Please help, what can i do?

    Reply
    1. Team BankBazaar

      Hi Sandeep Agrawal,

      We are so sorry to hear that. If you’re unable to pay the Home Loan then the bank can take possession of your property. But, in this case, since the builder has not yet given you possession of the flat, it’s best to check with your bank regarding how to proceed further.

      Cheers,
      Team BankBazaar

      Reply
  41. Shashank shekhar pandey

    can the bank declare me NPA without informing me ? can they draw money from my current account to pay my installment without my permission ?

    Reply
    1. Team BankBazaar

      Hi Shashank shekhar pandey,

      No, the bank will ideally send you an intimation or follow up with you before declaring your account NPA. However, if they have been trying to contact you and you have not responded to them, then they are within their rights to declare your account NPA.

      Cheers,
      Team BankBazaar

      Reply
  42. Shashank shekhar pandey

    the period of 90 days is counted from the day of 1st installment or from the end of the relevant quarter ? say i was to pay my 1st installment from oct 2016 i will be declared NPA in jan or 90 days from january ?

    Reply
    1. Team BankBazaar

      Hi Shashank shekhar pandey,

      Only the days starting from the day after your due date will be taken into consideration for NPA declaration.

      Cheers,
      Team BankBazaar

      Reply
  43. AKSHAY

    Hi,
    I had taken a home loan or Rs. 13.30 lacs from ICICI BANK in february, 2005 @9.25% p.a. repayment tenure was 10 years.
    I have been paying regularly till date.
    the bank had increased the rate of interest from 9.25% to 16.75%.
    Then after running and complaining and requesting from pillar to post someone senior in the bank realised their mistake and wrong doing and then helped me by reducing the rate of interest to 9.9%.
    I have been receiving intimation since my loan got sanctioned regarding increase in rate of interest of interest or decrease in rate of interest, which became 16.75%.

    How can i get the excess money paid by me to the bank in the form of extra interest as the HOME LOAN in India has never gone so high.

    I have complained to all customer support, also grievance redressal cell, Ms chanda Kochar, RBI, and banking Ombudsman.
    But there is no one to help me out and the bank has shut its ears and there is no body in the bank to understand this problem.
    Please guide and help me.
    Thanks
    Akshay

    Reply
    1. Team BankBazaar

      Hi Akshay, We’re sorry to hear about this. We advise you to get in touch with a legal counsel to resolve this issue. You can also write a complaint to the banking ombudsman. Cheers, Team BankBazaar.

      Reply
  44. Shashi Kant

    We are 2 brothers. Me & My Elder Brother bought a home in 2014 & took a home loan. After his marriage he left that home & not paying even single EMI & not ready to transfer the deed or Power of attorney of that particular home. We both are 50% owners of home, He is first applicant whereas I am co-applicant. I was the person who was paying EMI since past 2 n half years & now even I am also not paying EMI as still has 50% share in that house where he is not paying anything in homeloan & not taking care of family as well. He is not ready to pay any EMI, not ready to clear home loan & not even transferring his portion under my name. I Spoke with Bank People as well but they are not able to provide any solution. What’s the way to sort this thing out soon.

    Reply
    1. Team BankBazaar

      Hi Shashi, You might have to get legal help. But speak to your brother before you decide to go down the legal route. Cheers, Team BankBazaar

      Reply
  45. Mahi khan

    Hi bankbazar team can i contact you because my problem very big & very long period & i can’t explain you each & everything throw inbox.Please believe me i’m in trouble & i believe you have solution so pls pls help me it’s humble request. If you will contact me i will appreciated & very thankfull.

    Reply
  46. abcd

    can bank after self-investigation take control of the assets of the defaulter which were not pledged by the defaulter an has higher value because the asset which was already pledged had less value than the loan amount.

    Reply
    1. Team BankBazaar

      Hi abcd, This might be possible after the bank gives notice to the defaulter. For better clarity, we suggest that you get in touch with your legal counsel.

      Reply
  47. xyz

    My PL of 245000 is from ICICI bank and I have paid 17 EMI on time. Now the outstanding amount is 175000 approx.I am unable to pay my Personal Loan EMI due to job lost. At present I am not earning a single penny.I am struggling to feed my family and unable to settle the loan. what should I do ?

    Reply
    1. Team BankBazaar

      Hi xyz, We’re extremely sorry to hear about your situation. We hope things get better soon for you. With regards to your loan repayment issue, kindly get in touch with ICICI bank as soon as possible and explain your situation to them. Cheers, Team BankBazaar

      Reply
  48. xyz

    Your comment is awaiting moderation.

    My PL of 245000 is from ICICI bank and I have paid 17 EMI on time. Now the outstanding amount is 175000 approx.I am unable to pay my Personal Loan EMI due to job lost. At present I am not earning a single penny.I am struggling to feed my family and unable to settle the loan. what should I do ?

    Reply
    1. Team BankBazaar

      Hi xyz, We’re extremely sorry to hear about your situation. We hope things get better soon for you. With regards to your loan repayment issue, kindly get in touch with ICICI bank as soon as possible and explain your situation to them. Cheers, Team BankBazaar

      Reply
  49. swathi

    Hi ,

    I have done icici credit card settlement 1 year bank. It was 47k total, we have done settlement to 30k and payed it and card has been cancelled. My cibil score now is 851. Now i want to apply for personal loan, will i get it?

    Reply
    1. Team BankBazaar

      Hi Swathi,

      That’s a good score. And of course, you may get a Personal Loan. Check if you’re eligible for one here.

      Cheers,
      Team BankBazaar.

      Reply
  50. P.C.Pandey

    I have taken a Home Loan of 32 Lacs from HDFC ltd and made down payments of 24 Lacs from my own savings. Till date I have paid my EMI regularly but for last two years I am not in Job and finding paying EMI impossible.The Builder was suppose to give possesuion in 2013 but still there are no chance of it’s completion.I am in a very bad situation.I am willing to forgo my down payments and EMI paid in the last five years.Can I ask HDFC to take over the Flat since I am not able to oay my EMI nor I am able to sell tghe Flat as no one is willing to buy it.

    Reply
    1. Team BankBazaar

      Hi P.C.Pandey, Kindly get a legal opinion on this matter. Cheers, Team BankBazaar

      Reply
  51. Dattatraya Udagiri

    I’d taken joint Home loan with brother from ICICI bank in year 2010-Rs 27 lacs. In year 2015 I’d taken home loan top up of 30 lacs . All these years I’d paid up the EMIs regularly until this year facing difficulty on repayment bcos of my job loss. Now I want to sell off this property @Rs 75 lacs is expected. About Rs 50 lacs would go in foreclosure of these both loans. All these years only I’ve availed income tax benefits on this property. Want to save maximum income tax from income received from selling property.
    I’ve following 3 queries.1) How to remove my brother’s name from joint home loan account a/c 2) Removing brother’s name from this asset from CIBIL report too. 3) Income tax applicable on sale of property Rs.75 lacs .and ways to save tax without buyingnext property ?

    Reply
    1. Team BankBazaar

      Hi Dattaraya, You can ask the bank to remove your brother’s name from the loan application. You can also check if they will send this information to credit bureaus to correct the loan account on your credit report. You can save capital gains taxes by investing in capital gain bonds. Read this post for more info – How To Save Tax On Long-Term Capital Gains. Cheers, Team BankBazaar

      Reply
  52. Somrita

    In 2014 I took a home loan( amount 10lacs) from HDFC to buy a flat. I have paid EMIs regularly till October 2017. In July 2017 i lost my job. I paid some EMIs from my savings and i was able to pay till october 2017. I am looking for a job but no luck yet. As a consequence I have defaulted my EMI for 4 months. Now HDFC has sent me a legal notice to initiate appropriate actions under u/s 25(1) of the Payment and Settlement Systems Act, 2007. They have threatened me that they will start criminal proceeding against me. My questions is I have taken the loan by keeping the flat mortgaged. As the loan is secured then why HDFC is threatening to start criminal proceedings against me. Can i land up in jail.

    Reply
    1. Team BankBazaar

      Hi Somrita, Your situation is rather unfortunate and we certainly empathise. Kindly get legal help on this matter to avoid any future issues. Cheers, Team BankBazaar

      Reply
  53. Suhash

    I have taken home loan for 20 years with the emi amount Rs.17559/- @ interest 11.25% from DHFL.
    I have paid EMI regularly for more than 4 years but now I am jobless.
    I am ready to surrender the asset to the DHFL.
    I just wanted to ask you question is that possible to stay at same place till the asset sale by DHFL ?
    Is they sale the property at the current rate of asset.
    Can I get the differ amount from the due amount of Loan.
    In what time of period they take for sale the asset.
    Pls. advise.

    Reply
    1. Team BankBazaar

      Hi Suhas,

      Once you default on the loan and your house is taken over by the bank, you might have to vacate the house. The sale proceeds will go to the bank irrespective of what price they sell it for. We suggest that you talk to the bank and see if they can reduce the EMI until you get another job.

      Cheers,
      Team BankBazaar

      Reply
  54. Wilson britto

    I am on brain Tb medication,the property mortgage is my sisters husband I am staying with my sister due to illness,now the bank officers were kind to reduce the amount in one time settlement but asked me to pay 5lakhs and rest I gave them cheque’s,5 lakhs have been paid but bank says I have to pay full amount which is impossible kindly please please help my health is very bad please help

    Reply
    1. Team BankBazaar

      Hi Wilson britto,

      Please speak to your bank about your situation. You can also write to the bank’s headquarters. If nothing works, please get the help of your legal counsel.

      Cheers,
      Team BankBazaar

      Reply
  55. Anamika

    Hi Team,

    Currently I do hold 3 PL with 17L, 18L & 8.9L and also 3 CC’s having outstanding of 5L and a overall it comes upto 47L. Right now my current salary is about 94K and I’m unable to pay all these things within a period of 5 years. I can only pay upto 70K by making 20K for my household expenses. My question is

    1) Is it possible to convert this 5 year term to a long term of 9 to 10 years.
    2) As I don’t have any assets like home, car or any other, I approached the bank and they’re saying its not possible at all and you need to come to our office and we’ll handover you to police custody and also they’re harassing me that they’ll be sending some goondas to hit me and do some nonsense infront of my family members and neighbors.

    Can you please do assist me how can I pay this huge amount of 47 Lakhs as its not possible to pay at all within 5 years. If they can provide me some time I’ll surely pay with all the interest of what they’re currently added. Please do let me know whom do I need to contact for this. Don’t ask me to talk to bank as they’re not in a position even to listen my situations. I even wrote a letter to Karnataka CM and also to Honorable PM in his portal. But nothing is coming in my way. I’ve lost all my hopes even to live in this world with mental stress I’m bearing . So please do kindly help me out to come out of this situation.

    Reply
    1. Team BankBazaar

      Hi Anamika,

      Unfortunately there is no other way other than talking to the bank. You can write to the bank headquarters about your situation and see if they can help you. You could ask family members if they can become a co-borrowers for your loans and provide assets to help reduce the loan tenure. You can also take the help of your legal counsel as banks aren’t supposed to harass customers.

      Cheers,
      Team BankBazaar

      Reply

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