What happens if the personal loan is not repaid? Know Bank Rules 2022

What action can the bank take against you if you are not able to repay the personal loan amount due to any reason? This is the question of many people. In this article, we are going to tell you that if you have taken a loan from any bank or NBFC, and are not able to repay it, then in this situation what will happen if you do not repay this personal loan? So stay tuned with us in this article to know the details of the new rules related to non-repayment of loan –

What happens in case of non-payment of personal loan?

The following actions can be taken by the consumer for non-repayment of personal loan issued by any bank or NBFC –

What happens if personal loan is not repaid

  1. Firstly, late fees and penalties are levied on paying the EMI of the loan.
  2. Along with this, the bank tries to find out the reason for the delay in repayment of the loan by making email and phone calls.
  3. In case of non-repayment of EMI or loan for a few months, the Internal Recovery Agent of the bank will contact the customer.
  4. If they do not work, then this task will be assigned to the Third Party Recovery Agent.
  5. Even after doing this, if the consumer does not return the loan, then legally the bank also issues a legal notice.
  6. If the loan amount or EMI is not deposited even after 180 days, then the bank declares the consumer’s account as black list and defaulter.
  7. After this, an FIR can be lodged by the bank under statutory section 138 and Negotiable Instrument Act, 1881. Under which the guilty can be jailed for 2 years and have to pay fine.

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Common reasons for not repaying personal loan –

No common person wants to get caught in the clutches of the bank and the law, but one cannot rule out the possibility of not being able to repay the loan due to some problem. Generally, the following reasons may be due to not making the loan repayment –

  • Job Loss
  • Business Loss
  • Medical Emergency
  • Borrower’s Death

These IMPACTs can happen on the profile of the loan defaulters –

  1. The CIBIL score of those who are unable to make EMI or loan repayment will become useless.
  2. They will not get loan from any bank or NBFC in future
  3. The bank puts the loan defaulters in the defaulter list.
  4. All the banks have zero confidence in the defaulter list.

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Action can be taken by the bank against those who do not repay the loan –

If the amount of personal loan taken by the consumer is very high, then in addition to legal action, the bank can also adopt these steps to get the loan back –

  • Under the Arbitration Close in Loan Agreement Act, 50% of the salary of the consumer can be deducted every month from the company in which he works.
  • If the loan amount is more than 20 lakhs, then the Bank Debt Recovery Tribunal (DRT) can help. Due to which the consumer may face a lot of problems.
  • Apart from this, the property of the borrower can also be confiscated, if the property details have been given at the time of taking the loan.

Question and Answer (FAQ)-

What if the consumer has money and is deliberately not paying the loan?

Such users will be given an opportunity to express their views through a commitment. After which they can be put in the willful defaulter list. And the option of legal action is always with the bank.

What are the rights of the consumer in case of loan repayment?

Consumers can express their views with the help of the court. Apart from this, the consumer cannot be beaten or mentally tortured in connection with non-payment of loan.

What happens if EMI is not paid?

In case of non-payment of EMI of the loan, the bank may levy late fee and penalty on the loan amount. Apart from this, the customer can be contacted by email and phone call.

Also read – See new list of bank interest rates before personal loan 2022