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Handle Your Home Loan Default Effectively

Mortgage LoanEvery common man in India would dream to have a house of his own. Home loans offered by many recognised banking and non-banking institutions have made it easy for people to reach their biggest goal of the life earlier than the time expected. Good that you are able to fetch the loan at an affordable rate of interest after your extensive research. Taking the home loan obliges you to repay the loan along with the interest rate every month. When unexpected medical expense drain off your savings and you are unable to repay the loan for 3 consecutive months, the lending institution considers you as a defaulter. However, this is not the end of the road, there are many options to explore when you don’t want to lose your dream home due to default.

Home Loan Default Is Not an End

Notice regarding the payment

Banks consider you as a defaulter of the loan only when you miss the repayment of the loan for 2-3 consecutive months. The bank will now send the notice that as reminders for repayment of the loan. The bank considers you as a defaulter if you fail to act on the notice sent by them. At this juncture bank considers you as defaulter moves ahead with reprocessing your property as last option. Even this action is taken by the bank only after 3-5 months of sending the notice to the borrower.
Negotiation

You are given enough time to think about the repayment of the loan even after sending the notice about repayment of the loan, you can negotiate with the bank. Arrange a meeting with the bank and let them know why you were unable to repay the loan since few instalments. Request for a feasible solution that offers some mutual benefit. If possible get your loan reconstructed on healthier terms or consider foreclosing the loan if you are willing to sell the property.

Rescheduling the loan terms 

This is an option considered by most of the banks for mutual benefit in the case of loan default. When they are convinced by your reason behind not repaying the loan, they will consider extending the loan term which will reduce the burden of your monthly EMI of the loan. This possible reduce the amount that you have to pay towards the repayment of the loan. Of course, this is a viable option than pre- closing the loan because it mostly does not include any charges.

Deferring payments

The borrower can even choose to go with deferring the payment of the loan in case he is anticipating a big raise in the in the earnings or maturity of some financial funds.  Choosing this option many penalise the borrower with some fee. Make sure you know the charges levied by the bank in case of choosing this option.

One time settlement

you can ask the bank to waive some charges if you are going with the option of one-time settlement. However, if this is not possible, you can file bankruptcy which relieves you from the burden of the home loan commitment.

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