Loan Defaulters Rights: Failure to repay the loan will lead to property auction, so you should know your rights...

Many types of loans are offered by the bank to meet all the needs like house, land, car, etc. Middle-class families get a lot of relief from loans. Especially if you want to buy a house or flat, it is not easy to raise the lump sum price. In such a situation, a home loan is helpful for them. Their work gets done easily through loans and later they keep paying its installments along with interest.

Home loans are for a very long time, hence the bank keeps the property documents of the customer with itself while giving the loan. If the loan taker is unable to repay the loan amount, the bank has the right to declare the loan taker a defaulter and legally confiscate the mortgaged property. People who depend on private jobs have no employment opportunities. In such a situation, if you ever face such a problem due to which the bank declares you a loan defaulter, you still have some rights as a human being. Everyone should know about this.

First, know when a loan defaulter is declared
If you do not pay two EMIs of the loan, then the bank first sends you a reminder. If you miss payment of three consecutive installments of your home loan, the bank sends you a legal notice to repay the loan. But if you do not complete the EMI even after the warning, then you will be declared a defaulter by the bank.

Rights of loan defaulter
In case of non-payment of loans, lenders can take the services of recovery agents to recover their loans. But, these recovery agents do not have the right to threaten or misbehave with the customer. If the recovery agents misbehave with the customer in any way then the customer can complain about it to the bank. If there is no hearing from the bank, the door of the Banking Ombudsman can be approached.

The bank cannot take possession of your assets just like that. It has a definite process. When the borrower does not repay the loan installment for 90 days, the account is classified as a non-performing asset (NPA). However, in such a case, the lender has to issue a notice of 60 days to the defaulter. If he does not deposit the loan even within the notice period, then the bank can proceed with the sale of the asset. But even in case of a sale, the bank has to issue a public notice of 30 more days.

The bank or financial institution from where you have taken the loan has to issue a notice stating the fair value of the asset before selling it. In this, it is also necessary to mention the reserve price, date, and time of the auction. If the borrower feels that the asset has been underpriced, he can challenge the auction.

If you keep an eye on the process of auctioning the asset as you have the right to get the additional amount left after recovery of the loan. The bank has to return the remaining amount to the creditor.

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