Legal Implications: If you miss out on paying up to three of your home loan installments, the bank may seize your property. Home as an NPA: Missing out on three consecutive loan repayment installments can make your bank declare your home as a non-performing asset. Seizing of Property: Banks give you about two more months to pay your missed loan installments after sending a legal notice. Impact on Cibil / Credit Score: Another thing that gets impacted by not making timely home loan repayments is your credit score.
Restructure Your Loan: You can contact your bank and discuss the ways to get your home loan restructured based on your financial preferences. Liquidate Other Investments: You can consider liquidating other investments that you kept for financial emergencies. Contact Your Relationship Manager: Instead of switching off your communication channels, you can talk to your relationship manager at the bank/financial institution and find out your options. Consolidate Your Dues: You can also consider consolidating all your dues, including your home loan repayments, and take a personal loan to get rid of all of them at once. Dispose of the Property: This could be the last alternative that you choose to make your home loan repayments.
An Adequate Notice: Every borrower has a right to get a prior notice from the bank about the legal proceedings. Fair Valuation of Assets: The bank must send a notice with an evaluated fair price of their property. Access Amount Refund: Borrowers can monitor the process of the auction of their property. The bank is bound to provide them with the remaining amount out of the auction price, after recovering the outstanding home loan amount.
– Check for your alternatives, such as increasing the loan tenure, reducing the interest rate, consolidating your debts, etc., and act wisely. – Contact your bank and initiate a discussion on how you will manage to pay the missed EMIs. – Gather all your home loan documents including EMI payment receipts, as you may need them during the discussion. – Create a convincing financial plan to help the bank understand your financial strategy.
If you have a sound relationship with your bank, they may help you considering that you are a responsible borrower and will pay all your dues as soon as possible. You can use our Home Loan EMI Calculator to calculate the estimated amount that you can pay in a specific duration. It is always a good option to negotiate and come down to an agreement with your bank instead of being a home loan repayment defaulter.