EMI Bounce: When does the bank take possession of the property if the home loan is not repaid? Loan takers should know the rules..
If you look at the real estate market today, it is growing rapidly. Due to this, the prices of property have reached the seventh sky in cities and rural areas as well. In such a situation, it has become very difficult for the middle class to buy a house today, but banks and finance companies have also made this task easy. Today, home loans are easily available from banks.
People can buy their dream home by taking a home loan. Usually, people living in cities take more home loans. Because employed people easily get loans. If you do not pay the home loan installments (EMI) on time, then you may have to face many problems. Therefore, before taking a loan, consider some important things.
RBI gave big relief to home loan takers, issued guidelines to all banks
A home loan (Home Loan News) is a large amount that is taken for a long period. Everyone thinks that they will repay the home loan by paying the installments easily every month. But suddenly due to job loss or medical emergency, we miss paying EMI on time. Do you know what happens if you do not pay home loan EMI? Till how many EMIs does the bank wait and what action does it take? A home loan is kept in the category of a secured loan, so in return, the customer has to mortgage a property with the bank as a guarantee.
What will the bank do if EMI bounces?
RBI has some guidelines regarding home loans. If a customer does not pay the first installment of a home loan, then the bank or finance company does not take any action. In such a situation, the bank feels that due to some reason an installment is getting delayed. But when the customer does not pay two consecutive EMIs, the bank first sends a reminder. Even after this, if the customer does not pay the third installment, then the bank sends a legal notice to repay the loan.
If the customer does not pay the loan installments even after the bank sends a legal notice, then the bank declares the customer a defaulter. Also, the bank considers the loan account as NPA. The limit for other finance companies in this case is 120 days. If the customer does not pay the loan EMI within these days, then the bank or financial institution is in the mood to take action and start action to recover the customer's loan amount.
RBI rules -
A home loan is a secured loan. To avail it, the property is mortgaged so that if the loan is not repaid, the bank can recover the loan amount by auctioning that property. However, the bank does not take this step if one or two installments bounce. When the bank feels that the customer will no longer pay the loan EMI, then this is the last option from the bank. According to RBI guidelines, the customer is given enough time to repay the loan. Legally, the last option for the bank to recover the loan amount is to auction the borrower's property (Property Auction Rule). The loan amount is reimbursed from the amount received from the auction.
Disadvantages of not paying EMI -
If the customer does not pay the EMI before the date of the auction (Property Auction) i.e. even after 1 month of receiving the auction notice, then the bank proceeds with the auction formalities. However, within these 6 months, the customer can contact the bank at any time and settle the matter by paying the outstanding amount. The biggest disadvantage of not paying the loan on time is that the bank declares the customer a loan defaulter. Due to this the customer's CIBIL score gets spoiled. If the CIBIL score comes down, then there will be difficulties in getting any kind of loan in the future. Many times the banks even refuse to give loans (Banl Loan News).
What to do in case of not paying the installment?
If you are unable to pay the home loan installment due to financial scarcity, then there are some solutions for this as well. The customer can contact the bank from which he has taken the home loan and discuss the ways to restructure the home loan based on his financial priorities. The customer can tell his problem to the bank and submit the documents. Restructuring the loan can help in postponing the EMI for a few months or reducing the EMI amount. However, in such a case, the tenure of the home loan will increase. Apart from this, you can also choose the option of a lump sum loan payment.
Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
