Nowadays, buying a house has become a little easier, this has been done by easy home loans. Especially in big cities, people take home loans and buy their dream homes. Because employed people get loans easily. However, now the home loan for flat culture is increasing rapidly in small cities also.

But many times customers are not able to pay the home loan EMI on time. Especially in case of job loss or medical emergency, people miss paying EMI (Home loan EMI). Do you know what happens if you do not pay home loan EMI? For how much EMI does the bank wait and then what action does it take? Home Loan (Home Loan EMI Calculator) is kept in the category of secured loan, hence in return, the customer (What is Home loan EMI) has to mortgage any property with the bank as a guarantee.

The bank does this work first

Now let us know, what are the guidelines of RBI on non-repayment of home loans. If a customer does not pay the first installment of a home loan then the bank or financial institution (RBI guidelines for home loan) does not take him seriously. The bank feels that an EMI is being delayed for some reason. But when the customer does not pay two consecutive EMIs, the bank first sends a reminder (what is an EMI reminder). Even after this, if the customer fails to pay the third EMI installment, then the bank again sends a legal notice to repay the loan.

In a way, with the non-payment of the third EMI, the bank comes into action. If the loan is not repaid after the legal notice, then the bank declares the customer a defaulter (Loan defaulter notice). Also, the bank considers the loan account as NPA. In the case of other financial institutions, this limit is 120 days. After this time limit, the bank starts thinking about the recovery process (response to loan defaulter notice).

RBI Guidelines

In a secured loan, the property is mortgaged, so that if the loan is not repaid, the bank can repay the loan by selling the property. However, this is the last option from the bank's side. According to RBI guidelines, customers are given a lot of time to repay the loan (RBI guidelines for loan defaulters). The last option legally available to the bank to get back its money is auction. The amount received from the auction is used to offset the loan amount.

Generally, after not paying three months of EMI (loan EMI kya hai), the bank gives two more months to the customer. If the customer defaults on this also, the bank sends the customer an auction notice with the estimated value of the property. If the customer does not pay the installment before the auction date (loan collateral kya hai) i.e. even after one month of receiving the auction notice, the bank proceeds with the auction formalities.

However, within these 6 months, the customer can contact the bank at any time and resolve the matter by paying the outstanding amount. The biggest loss due to not repaying the loan on time is that the bank declares the customer a defaulter. Due to this, the CIBIL/credit score of the customer gets spoiled. Due to a bad CIBIL score, it becomes difficult to get any kind of loan in the future.

What to do if you are not able to pay EMI?

If such a situation arises with someone, i.e. they fail to pay the EMI, then there are some solutions for this also. The customer can contact the bank from where he has taken the home loan and discuss ways to restructure the home loan based on his financial priorities. The customer can tell his problem to the bank and also submit the documents. Restructuring loans can help in deferring EMI by a few months or reducing the EMI amount. However, in such a case the tenure of the home loan will increase.

Apart from this, the direct solution is to try to repay the home loan EMI on time whenever possible. For this, if there is a fixed deposit, break it. If you have any investment, withdraw it and pay the EMI. For this, you can also borrow money from family or friends and later return it at your convenience.

What to do if a recovery agent threatens you

Due to non-payment of loans, financial institutions put pressure on the customer by sending recovery agents. He is also threatened and intimidated. Many cases of arbitrariness of recovery agents keep coming to light across the country. If you are also harassed by the recovery agent (loan recovery agent se kaise bache) regarding repayment of a home loan, then you can complain directly to the police. Since non-payment of loan installment comes under the scope of civil dispute, hence no arbitrariness can be done to the defaulter. Apart from this, you can also give a written complaint to RBI.

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