When
a fixed amount of money is lent to the borrower with a fixed repayment time, it
is called personal loan. They do have a fixed interest rate over the repayment
tenure.
Further,
personal loans are segregated to two other categories, unsecured and secured,
which we shall discuss more on. Beside all the benefits, if you still want to
default your score, It is pretty good as defaulting your financial image.
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Which
defaulter are you?
The
careless:
There are people who avail the loan and not care enough to repay it on time for
many reasons such improper calculation between income and expenses.
People
realise those mistakes once they start paying the EMI. They just manage paying
the EMI, which in most of the cases not completely or it is not on time. Which
is again a default.
The
candid:
People who have real tight situations and genuine problems to deal with. They
pay all the EMI on time but with the unstable condition they cannot repay the
complete amount on time.
The
smart ones:
They love to play around by roaming scot free without paying the EMIs. However,
they can mislead the banks with all the fake reasons.
Unable
to pay the loan?
Banks
do not need collaterals for personal loans; hence they are called unsecured
loans. They have a way to deal with the
personal loan default cases.
·
Banks
and other financial institutions have a different way of dealing with defaulters.
·
They
can offer negotiations.
·
If
that fails, they could resort to insist the borrower to present a post - dated
cheque for clearing.
·
That
in case of vehicle or home loan, banks can issue notices, such as public
notice, normal notice and Fair value notice.
·
If your dues are not paid over 90 days, then
the banks will declare you as an NPA.
·
If
not, the personal loan collateral is seized and sale proceeding are initiated.
Conclusion:
What
the borrower (loan defaulter) can do here? Not much. But if the defaulter
thinks that ‘property seizure’ or ‘property fair value’ has not been handled
properly, they can raise the objection in written to the bank. The bank is
obliged to reply within 7 days. But after the reply, the bank can go
ahead and sell the asset as per the public notice issued.
