Don't be worried about default of EMI of bank loan, Keep these things in mind

Highlights: Whether the loan is for the house, car or any kind, EMI must be deposited on the due date. But sometimes it happens that we miss the EMI. Whatever may be the reason, there is only one penalty.

While government banks charge a penalty of up to Rs. 500 on one installment, in private banks this amount can be up to Rs. 1000 as well. If you too are in any such problem then you should take some necessary steps.

Keep these things in mind

Talk to bank manager

As soon as the first installment bounces, go to the lending bank and talk to the manager. Usually the manager recommends paying the next installment carefully. If your problem is big then you can be applied to hold the EMI for a few months. Later, the money can be repaid if the money is arranged. However, to this extent the discretion of the manager works.

Advance vs Array

• There are two ways to repay EMI. One advance second arrear. Normally holders deposit advance EMI, but you can also fill in arrear EMI if required.

• The loan installment date is usually at the beginning of the month, it is called advance EMI. If you pay the installment at the end of the month, it is called arrear EMI.

Take this precaution

• Do not sign any bank documents without reading or understanding them. Do not start the process without knowing the loan policy and necessary documents. If you have taken a loan for the house, the bank will have to repay the loan even if the builder has not given the house on time.

• Be thoughtful about someone's guarantee for a loan. After becoming the guarantor of someone, you are also responsible to repay that loan. Before signing on the ECS form, check when the transfer is to begin and how many installments are to be known.

• Check your signature on the check given to the bank. The penalty for non-signing, non-receipt and return of checks also rests with the holder. If you have done a house deal with the builder, then you must see the documents of the land of the builder before taking a loan. In case of any deficiency, the bank can close the loan in the middle and you will have to pay the amount given by the bank.

60 days after first notice

• If you have received any notice from the bank about not repaying the loan or monthly installment bounce then do not worry. Many times it happens that bank officials want to understand your intention.

• If you are unable to repay the monthly installment of the loan due to any real problem, then after getting notice from the bank, you have 60 days to repay the loan. If you do not repay the loan even within this period, the bank will send you a new notice.

• The deadline for this final notice will be 30 days. Even after this, if you do not repay the loan, then the bank can start the process of auctioning the property under the SARFAESI Act.

• On getting the notice of not repaying the loan from the bank, you can meet the officer and ask about it and raise objections. The bank officer will have to answer your question within seven days or give the correct reason for it.

In this way, reduce your monthly installment

• If you want to finish the monthly installment of your loan soon, you can increase the EMI amount. Since you take most loans for a period of more than one year, you can easily increase the EMI amount by using salary increment, bonus etc.

• If there is additional income from somewhere, then that amount can be used for the prepayment of the loan. This will also help in reducing the loan tenure. In the case of a large loan such as a home loan, prepayment in the initial years reduces the loan duration significantly. Prepayment in a loan can either reduce the term of that loan or reduce its EMI amount.

• If the interest rate of the loan is high and the other bank can offer the loan at a lower interest, then the loan refinancing can also be done. However, for this, the habit of repaying the loan (credit history) should be better. Even a small difference in interest rates on long-term loans like home loans is capable of saving millions of rupees.

Source: Web