If the loan taker dies, who will pay the EMI and interest? Know the bank's rules and your responsibility

Nowadays, the trend of working by taking a loan is becoming common. In such a situation, the question comes to our mind that if the person taking the loan dies, then who will pay the loan, let us tell you.

In today's era, it is common to buy cars, expensive mobiles and other valuable items on installments. People are also fulfilling their needs by taking loans from the bank. Before giving the loan, the bank gives the loan keeping in mind the person's credit history, income source and repayment capacity so that the responsible person can pay the loan installments on time. But in such a situation, if the person taking the loan dies during the loan repayment period, then all kinds of questions arise as to who will take responsibility for the loan.

When a person takes a loan from the bank, he makes a legal contract that he will repay the loan amount along with the interest by the stipulated time. But if the loan taker dies due to any reason, then the question arises that who will pay the loan now? Does the bank waive off the loan? Does it become a burden on the family? Here we understand this situation in detail.

Who repays the loan after the death of the loan taker?

If the loan taker dies within that time period, then the responsibility of repaying the loan does not fall on any member of the family. The bank first ensures who was the guarantor or co-applicant at the time of taking the loan. Only after this the bank contacts his guarantor or co-applicant.

What are the rules and regulations of the bank?

If the person taking the loan dies, then the concerned bank first contacts the co-applicant. Often the name of the co-applicant is registered in home loan, education loan or joint loan. On the other hand, if the co-applicant is unable to repay the loan, then the bank then contacts the guarantor. After this, if the guarantor is also unable to repay the loan, then the bank recovers the loan by auctioning the property. If the person taking the loan has taken loan insurance, then the insurance company pays the installments.