Home Loan EMI: If you fail to pay how many home loan installments, the bank will declare you a defaulter, know the rules..
In today's time, everyone needs a home loan, personal loan, or any other loan. And it is obvious that if you have taken any loan from the bank, then you will have to pay it, and that too with interest. Yes, if you pay the installment on time and your CIBIL score is good, then you can get relief in interest. Due to this, you can easily repay it in installments every month. But if the EMI bounces due to financial constraints, then you may get into trouble. Due to long-term home loans, the risk of installment bouncing is high.
Everyone is aware of the fact that a home loan is a long-term loan. After taking a home loan, if the borrower loses his job or gets into another loan or in case of a sudden medical emergency, then the risk of EMI bouncing increases. If you have taken a home loan or are thinking of taking one, then you should know what the bank does if the installment bounces and when the borrower is put on the defaulter list.
When does the bank declare the borrower a defaulter -
If the first installment bounces from the borrower, then the bank does not take it seriously. Because the bank considers it a default. When two consecutive installments of the borrower bounce (Home loan installment bounce), then the bank takes notice of it and in such a situation the bank sends a notice to the customer to pay the installment. As soon as the customer misses the third installment as well, the bank sends a legal notice to the customer. If the borrower does not pay the EMI even after receiving the legal notice, then the bank comes into action (bank rules for property auction) and puts the borrower in the category of defaulter.
Opportunities to repay the loan are available before the auction -
According to the rules of the Reserve Bank of India (RBI Loan Rule), if a borrower does not repay the installment of the bank loan for 90 days, then it is considered as NPA (Non-Performing Asset). In such a situation, the last option left is auction. However, it does not happen that the property is auctioned as soon as it is declared as NPA (Bank Rules for NPA). NPA also has three lists - Substandard Assets, Doubtful Assets, and Loss Assets.
When a borrower does not repay the loan for a year, then that account remains in the category of Substandard Assets, after which Doubtful Assets are formed, in this the customer gets more than a year and when there is no hope of loan repayment, then it is considered as 'loss assets'. After this, the bank starts the auction process.
Bank issues notice before auction-
When there is no hope of recovery of the loan from the borrower, then the bank chooses the path of property auction. Before the auction, the bank has to issue a public notice. This notice contains details about the correct price of the property (property rates), reserve rate, and date and time of auction. If the borrower feels that the price of his property has been kept low, then in such a case he can challenge this auction and demand a fair rate.
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