What to do if you are unable to pay your mortgage EMI
What to do if you are unable to pay your mortgage EMI
In order to obtain a home loan, the borrower must pledge his home as security and provide the bank with a guarantee.
The availability of home loans has been crucial in enabling the average person to realise their “dream of owning a house.” People are now able to purchase apartments even in large cities. But occasionally getting a home loan can become too much for you. It is crucial for you to read this news if you have already taken out a home loan or are about to do so. Knowing when banks start putting pressure on clients to recover is vital for you to know.
In fact, many borrowers find themselves unable to pay back their loans because of other obligations or a lack of employment. A mortgage, however, is regarded as a secured loan. In return, the client must use his home as collateral and provide the bank with a guarantee. Recovery is therefore made simpler in these situations. Banks must nonetheless take action against these consumers. Learn what actions banks may take against borrowers in specific situations.
How soon does the bank act?
The bank first sends a notice to the consumer if they don’t pay two consecutive EMIs. The bank sends the client a legal demand to repay the loan if they still fail to pay the third EMI. In fact, when a customer misses the third EMI, the bank becomes wary. The bank designates a client as a defaulter if they fail to repay the debt despite getting a legal notice. And the bank views this loan account as a non-performing asset (NPA), in addition to other things. The bank starts the recovery process after completing the complete process.
What rules does the RBI have?
The property is mortgaged as collateral for loans secured by property, such as housing loans, in accordance with Reserve Bank of India (RBI) regulations. The bank recoups the debt by selling the asset in the event of default or non-repayment of the loan. According to the bank, this is the only remaining alternative for loan recovery. A customer is actually given a fixed deadline to pay back the loan. In the event that a client misses the deadline for the installment payment, the bank holds an auction to recoup its funds. The auction’s earnings are used to pay off the loan.
How much time is allotted to the customer?
The customer has two months to pay the debt after the letters are sent. The bank will send an auction notice and an assessment of the customer’s property’s value if the installment payment is still outstanding. The auction is called off if the buyer makes the payment even after receiving the auction notification but before the actual sale. The bank will start the auction process if the customer still doesn’t pay.
What choices are there?
According to the rules, the bank may declare a borrower in default if they miss three consecutive EMI payments. Their credit score will suffer as a result. It becomes challenging for the borrower to get additional loans in this circumstance. In that scenario, get in touch with your bank if you are unable to pay any EMIs. Request a little extra time to pay. They might give you more time to pay the debt.
The bank may offer you the option of loan restructuring if you find yourself in a scenario where you are unable to make your EMI payments. You may be able to reduce the EMI amount or postpone payments through loan restructuring for a short while. However, this can lengthen the term of your mortgage.
