What Will Happen If You Can’t Repay Your Home Loan in India?

Acquisition of loans is on the rise. The degrees to which these poor and lower middle-income groups take loans to construct their houses are hundreds and thousands across India. Forgetting the loan, there might be bad times that hit you in such a way that you would be unable to pay back the amount that you were given as a loan. In that situation, what will happen?

In this blog, we will talk about some possible difficulties you might face while repaying the money, things that can happen when you don’t pay the amount, and handling those issues in the best possible way. If you are in contact with a business loan agent, talk to him and discuss the problem you are facing or are going to face in the future.

What Could Be Some Possible Outcomes When You Can’t Repay Your Home Loan?

According to the law, if you don’t repay the loan amount in full, the loan company can take strict action against you. Here are a few important aspects that you must learn about-

When you just miss one downpayment, the loan company will call you to remind you about the payment.
Even if you miss the payment date, they will give you a grace period. This period can vary from one loan company to another.
According to Indian law, when you don’t pay for 90 days, then only the bank will declare it as NPA.
The SARFAESI Act is quite strict in this country. In most cases, the bank or the loan company will send you legal notice if you don’t pay the amount in 60 days.
In most cases, when a person fails to pay his loan, the bank or the lending company will take over the possession.
Further, these lending companies will auction your property and sell it to the highest bidder.
When you fail to repay the amount, your CIBIL score will definitely take a toll.
On top of that, you have to face a lot of legal issues in most cases, especially if you don’t have much help in these matters.

Handling this Situation

Before getting a loan, it is better to check a loan agent app. These apps will help you find some of the effective loan options as per your need and then choose the best one. Here are a few aspects that you must learn to handle a home loan default situation in the best possible way-

When you are facing challenges to pay your debts, better to talk to the lending company officials.
They will try to understand your situation and find solutions on your behalf.
In some cases, you can look for a better loan restructure. This can impact your existing loan differently. For example, you can reduce the EMI by choosing a larger tenure.
Once you handle the initial situation, it will help you further.
Are you familiar with loan transfers? If the lending company allows, it is possible to change your loan interest. This is helpful in managing your financial stress.
Choosing partial payment is essential to avoid any defaulting issues.
If possible, look for a financial advisor who can help you manage these aspects.

Here Are Some Tips That Will Help You

If you want to avoid home loan default, here are a few aspects that you need to know-

Do you have an emergency fund? It is better to create a fund that you can use during difficult times. Even if you can’t pay the a particular month, this emergency fund can help you.
Having insurance is another plus point. Especially term insurance plans are important to repay your default loans.
Before using your monthly income, try to separate a portion of your salary that you can use to pay your EMI.
Closely monitor your financials. Try to control your spending so that you feel more financially secure.
Communication is the main thing while handling these issues. When you know how to talk to officials and look for better options, you will surely find something helpful.
Finally, try not to borrow much. Choose the amount carefully. Don’t get something that you can’t repay further.

When you follow these aspects, you can easily handle home loan default issues. Get professional help if necessary.