Loans have made it possible to achieve many long term goals in short term. People are now able to buy their dream home and car with the readily available financial assistance from the banks. Though banks sanction the loan after taking your repayment capability into consideration, living standards of the people, especially in the metro cities, will not let you adhere to the obligations of the loan payments. What if you have defaulted your home loan or car loan? Is it an end of the game? Absolutely no, though it is a good practice to default the loan, escaping from the lender should not be your choice. There are different ways that you can opt for a mutual benefit so this act will prevent its addition to non-performing asset portfolio.
Loan Defaulting Does Not Mean To Close Doors
One of the best ways to act against your loan defaulting is to reschedule your debt. Bank will help you with the same if they feel that quantum of EMI is troubling you. They will help by extending the loan tenure so that EMI falls down. Though the interest outgo in these scenarios is high, you will get a relief in your current financial situation. Later when the situations get better, you can renegotiate with the lender and choose for high EMI or prepay your loan.
This is one of the methods chosen by many there is a sudden change in their current cash flow due to a job change or any other reason. The banks give temporary relief to the payment of the loan. however, you will be charged with the penalty for no repaying the loan within the time frame that is agreed earlier.
One time settlement
Though everybody will be at good intentions to repay the loan when they take it, some uncertain situations in life may not make it possible. If you let the bank know your good intentions about the repayment of the loan, they will give an option for one-time settlement, the amount you have to pay with the onetime settlement will be lower than the original amount. However, the amount reduced by the bank differs from case to case.
Conversion of unsecured loans
Banks don’t entertain defaulting unsecured loans. They are very strict in collecting them back because they are at higher risk when you default them. One easy way to keep away from defaulting unsecured loan and stay in the bad books of the lender, convert into secured loan by pledging security. As the interest rate on the loan is reduced, you can comfortably repay your EMI.