Important Loan Rules: What happens when a person passes away, know these important rules...
In today's time, inflation is increasing very fast and along with inflation, the expenses of the people are increasing equally fast. To manage these expenses, you take the help of loans and loans are also available very easily nowadays. In such a situation, have you ever thought that if a person who has taken a loan? If he passes away, then who pays his loan after that? Many people think that family members will be harassed. But in reality, there is something else, so let's know the rules related to the loan.
If the person taking the personal loan passes away, the bank cannot ask for the loan amount from his family. A personal loan is not considered a secured loan, so the bank cannot force the legal heir to repay the loan. Personal loans are classified as unsecured loans.
If we talk about credit cards, then credit cards are also kept in the category of unsecured loans. If a person passes without repaying the loan, the bank cannot force the legal heir of the deceased to repay the loan.
Talking about a home loan, it is considered a secured loan. In this loan, the name of the co-applicant is linked with the loan holder. If the loan holder passes away without repaying the loan amount, then his legal heir will have to pay the remaining loan amount. Also, there is a provision of insurance while taking the loan. If the loan holder passes away without giving the loan and the co-applicant is unable to repay the loan amount. So in that case the bank can sell the house and recover the loan amount. If this is not the case, then under the SARFAESI Act, the bank can auction the customer's house and recover the loan amount.