When does the need for auction arise if the loan is not repaid? If you have taken a loan then know the rules of the banks
If you have taken a loan, you will have to repay it on time. If you are not able to repay the loan on time, the bank may start taking action against you and you may get into trouble. Let us know about it in detail.
TheKalamkar News (New Delhi). Whenever we buy or construct a house, we take a home loan, similarly when we buy a car etc. we take a car loan. This type of loan is kept in the category of secured loan because in return for it you have to mortgage any property with the bank as a guarantee. It is obvious that if you have taken a loan then you will have to repay it on time. If you are not able to repay the loan on time, the bank may start taking action against you and you may get into trouble. Know what kind of challenges you may face if you do not repay the loan installment.
Bank sends reminder first
If you do not pay two EMIs of the loan, then the bank first sends you a reminder. If you miss payment of three consecutive installments of your home loan, the bank sends you a legal notice to repay the loan. But if you do not complete the EMI even after the warning, then you will be declared a defaulter by the bank.
the record gets spoiled
If you do not repay the loan on time, your record gets spoiled and your credit score deteriorates. In such a situation, you may not be able to get a loan easily from the bank next time. Even if you somehow take a loan through Jugaad, you will get the loan at high interest rates with strict terms and conditions.
NPA before auction
The bank or the financial institution from which you have taken the loan, if you do not deposit three consecutive installments of that loan and do not pay the EMI even after warning from the bank, then the bank considers the loan account as NPA. In case of other financial institutions this limit is 120 days. In such a situation, a legal notice will be sent to whoever is the defaulter. You will be asked to repay the dues within the stipulated time.
Mortgaged property comes in danger
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. In such a situation, your mortgaged property comes in danger. The bank can take possession of your mortgaged property. This is the right of the bank.
The last option is auction
The loan taker is given a lot of time by the bank to repay the loan. But if the person taking the loan is still unable to repay the loan, then the bank sends him reminders and notices. Even after this, if the borrower does not repay the loan, then the bank takes possession of his property and then auctions it. That is, the bank gives many opportunities to repay the loan, yet in case of non-repayment, the loan amount is recouped by auctioning the property.