Bank Loan Recovery Rules: If someone does not pay his entire loan on time, the bank can take legal action against the loan taker with full authority.
New Delhi:
In today’s time, taking a loan for anything has become common. Whether you want to buy a house, take a car, want money for business or for any personal expense, people take loans from the bank for such needs. According to what you have taken a loan for the bank, according to it, you charge interest on you. To repay the loan, every month you have to fill the installment (EMI). Before giving a loan to a person, the bank finds out about his financial history and the bank gives a loan to that person only after being completely convinced.
What if death occurs before repaying the loan?
We all know that if someone does not pay his entire loan on time, then the bank can take legal action against the loan taker with full rights. But do you know that if the person who takes it before repaying the loan is killed, then in such a situation, who comes to the responsibility of loan? Today we will tell you how the bank recovers its money in the event of the death of the person taking the loan.
This step takes this step for loan recovery
According to Tata Capital, if a person taking a loan dies, then the bank first contacts the co-applicants of that loan to repay the loan. If the co-applicant is also not able to repay the loan, then the bank guarantor, the family members of the deceased’s family or the legal heir are asked to pay the rest of the money. If none of these people are able to pay the remaining loan, then in such a situation the bank can seize the property of the deceased and sell the outstanding loan by selling it.
How do banks recover home loan or car loan?
If a person taking a home loan or a car loan is killed, then banks seize their house and car. Then the auction of the seized house and vehicle is done. Banks recover their loan with the amount received from the auction. Similarly, in any other loan, banks can also seize the rest of the property of the deceased and then sell it and collect the loan amount.
Term insurance can be helped in such a situation
It is very difficult for any family to see a auction of a house or anything else. Therefore, to avoid such a situation, experts recommend that people must take a term insurance of at least Rs 1 crore. So that if you have to face any such untoward incident in future, then loan can be made with the amount of insurance.