Have
his home is the biggest dream of the common man. Buying a property now days in
not a child play. But financial institutes always ready to finance for a home.
They take it as granted and the safest bet.
So
taking home loan is not hard. But what if one is unable to pay the EMIs of that
home loan. There may be some cases where people unable to pay the EMIs like
some emergency or losing the jib etc.
Bank
does not forfeit the property immediately like bouncing 2-3 EMIs but if that
continue for six months, banks will take the property.
What should one do if fall in the same
situation where no option to pay the EMIs on time for a big period. There are
some points which one must remember even taking a small loan because one needs
to pay loan with interest always. These are some points which one must remember
if falls in same situation.
What
is the rule?
Banks
or financial institute does not want to attach one’s property and this is the
last option left with them. They always want to negotiate. Banks need to
enforce Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002, (SARFAESI) to recover non-performing assets (NPA).
Banks
generally reminds the borrowers about the last payment or misses the EMI. They mail
or phone you about this. After the three month default of non paying the EMI,
bank will send a demand notice to the borrower asking him to pay the dues as
soon as possible.
If the
borrower doesn’t entertain the mail or phone by the bank and also doesn’t pay
the dues, bank will send a legal notice through legal department. After the
legal notice send to the borrower, bank will wait for the next three months
before declaring it as Non performing assets(NPA).
After
declaring the assets as Non performing assets, bank can start the process of
recovering the property through the SARFAESI act. Even after acting this act,
bank will give the borrower 2 months time notice to clear the dues.
It means
it will take around 5 months from the first default when the bank send a notice
to the borrower that it has valued the property from the valuer and the auction
will take place on particular date. The auction date is also a month late from
the notice date.
So
the matter is simple. Banks are more keen to recover money from the borrower
than from legal procedure and from auction because it is a very timely process
and may take time as well as loss. Banks need to wait at least 6 months to
start recovery proceedings to take the property as attached.
The
borrower will get the notice from the debt recovery tribunal which is treated
as the last stage for the borrower to save his assets from the auction.
What should
the borrower do?
Attend
the hearing set by the tribunal. This is the must do step for the borrower. In this
case, one can get an agreement with the bank. Banks are more serious about track
record, and if one has good record and one tells about his serious problem for
not paying the debt, bank will offer some leeway to pay the dues.
Ask the
bank to restructure the loan and taking consideration about the future source
of income.
In case
of default in the loan due to increase in the rate of interest, ask the bank to
increase the tenure and keep the EMI at the same level.
Keep a
record of all the loan and loan payment. This makes a good track record and all
the credit revolves on the track record.
Problem
matters most. If bank is satisfied with the problem and satisfied with the will
of the borrower to pay the dues, bank may offer more time to pay the dues. But this
offer matters with case to case.
Banks
always try to get their money in the practical way. They even hear you in the
case of auction date declared and return it to you if problem is genuine and
borrower will pay the dues.
Keywords-home loan,house rent emi,home loan emi payment
