Home Loan: Bank action will start if you do not pay 3 EMIs of Home Loan, know these rules..


Home loans have made it easy for the common man to buy a house. Especially in big cities, people easily buy flats by taking home loans. However, flat culture is now increasing rapidly even in small cities. Especially employed people easily get home loans.

But many times customers are not able to pay the home EMI on time. Especially in case of job loss or medical emergency, people miss paying EMI. Do you know what happens if you do not pay home loan EMI? For how much EMI does the bank wait and then what action does it take? Actually, home loan is kept in the category of secured loans, hence in return, the customer has to mortgage any property with the bank as a guarantee.


The bank takes action when a third consecutive installment is not received
Now let us know, what are the guidelines of RBI on non-repayment of home loans. If a customer does not pay the first installment of a home loan then the bank or financial institution does not take him seriously. The bank feels that an EMI is being delayed for some reason. But when the customer does not pay two consecutive EMIs, the bank first sends a reminder. Even after this, if the customer fails to pay the third EMI installment, then the bank again sends a legal notice to repay the loan.

In a way, with the non-payment of the third EMI, the bank comes into action. If the loan is not repaid after the legal notice, then the bank declares the customer a defaulter. Also, the bank considers the loan account as NPA. In the case of other financial institutions, this limit is 120 days. After this time limit the bank starts thinking about the recovery process.

RBI guidelines
In a secured loan, the property is mortgaged, so that if the loan is not repaid, the bank can repay the loan by selling that property. However, this is the last option from the bank's side. According to RBI guidelines, customers are given a lot of time to repay the loan. The last option legally available to the bank to get its money back is auction. The amount received from the auction is used to offset the loan amount.

Generally, after not paying EMI for three months, the bank gives two more months to the customer. If the customer defaults on this too, the bank sends the customer an auction notice with the estimated value of the property. If the customer does not pay the installment before the auction date i.e. even after one month of receiving the auction notice, the bank proceeds with the auction formalities.

Risk of de folder
However, within these 6 months, the customer can contact the bank at any time and resolve the matter by paying the outstanding amount. The biggest loss due to not repaying the loan on time is that the bank declares the customer a defaulter. Due to this, the CIBIL/credit score of the customer gets spoiled. Due to a bad CIBIL score, it becomes difficult to get any kind of loan in the future.

If such a situation arises with someone, i.e. they fail to pay the EMI, then there are some solutions for this also. The customer can contact the bank from where he has taken the home loan and discuss ways to restructure the home loan based on his financial preferences. The customer can tell his problem to the bank and also submit the documents. Restructuring of loans can help in deferring EMI by a few months or reducing the EMI amount. However, in such a case the tenure of the home loan will increase.

Apart from this, the direct solution is to try to repay the home loan EMI on time whenever possible. For this, if there is a fixed deposit, break it. If you have any investment, withdraw it and pay the EMI. For this, you can also borrow money from family or friends and later return it at your convenience.


What to do if a recovery agent threatens you
Due to not being able to repay the loan, financial institutions put pressure on the customer by sending recovery agents. He is also threatened and intimidated. Many cases of arbitrariness of recovery agents keep coming to light across the country. If the recovery agent harasses you regarding the repayment of a home loan, then you can complain directly to the police. Since non-payment of loan installments comes under the ambit of civil dispute, hence no arbitrary action can be taken against the defaulter. Apart from this, you can also give a written complaint to RBI.

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