Rescue yourself from a debt trap!

By BankBazaar | March 28, 2011

If you are caught in a huge debt trap, no matter even if its Rs 1 crore, never hesitate to approach a debt counsellor for financial assistance. Getting out of such risky situations are definitely very difficult but not completely impossible. Approaching credit counselling centres can be of a huge benefit. Credit counselling centres have certain level of understanding with banks, who take these issues in front of the concerned bank, get into a mutual agreement and work out a possible solution.

In an instance, there was a person who was into huge debts and was involved in multiple personal loan borrowings. But unfortunately was detected by cancer. In such a situation, the credit counselling centre, approached the concerned person’s bank and after explaining the gravity of the situation at hand, they advised the bank to waive off the interest amounts and lower the EMIs by increasing the loan tenure.

ICICI Bank general manager-customer service and in charge of Disha B Madhivanan says that in cases of extremely genuine cases, the counselling centre even advises consolidation of different loans. In certain other cases, when the borrower has has borrowed from more than one bank then, the bank, that has lent the maximum amount, will seek to get maximum recovery of the loan lent. And other banks can come to a mutual agreement where they can get their money back on the loans lent as and when the recovery happens.

This makes the borrower answerable to a single authority. Also, the credit counsellor updates the CIBIL about the borrower’s position so that new loans cannot be granted. The debt counselling centres suggest ways to borrowers that they find is better to ease the difficult situation the borrower is in. The main reason of such centres is to increase the debt management and also to increase the awareness of the use of credit in India.

Credit counselling centres broadly cover three areas: Financial education, credit counselling and debt management. They conduct personal sessions with distressed borrowers and depending upon their assessment of how delicate the situation of the borrower is, advice is given. If in case, the borrower has any complaint about any employee in their respective bank, the counsellors will take this up to the higher authorities.

The higher authorities, will later check into the credentials of the borrower but it is not necessary that the bank should accept the recommendations put in front of the bank authorities, it is only a voluntary move.

Once the case is reviewed, the in-house counsellors conduct a personal interview with the borrower. Later, the counsellor discreetly contacts the borrower’s relatives in order to cross check the facts as presented by the borrower. Once, the counsellor is convinced by the genuine nature of the borrower’s situation, they approach the borrower’s bank, after which the series of negotiations begin where the percentage of their loan comprises in the total debt of the borrower in case of multiple loans.

Remember, its better late than never!

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