What happens if personal loan is not paid in India?

What happens if a personal loan is not paid? Is there a punishment for nonpayment of a personal loan? Will the defaulter go to jail straight away? There will be hooliganism displayed at the defaulter’s front door by the Banks? What are the bank loan recovery rules?

Suggested Reading: What is a Bad Bank?

A person who is under stress due to non-repayment of a loan, face further nightmares answering these question. Defaulting on loan payments triggers fear. No doubt. But it must also be remembered that there are rights of a loan defaulter as well. Banks (lenders) cannot start arm-twisting the defaulter.

Points to remember:

  1. Why a loan defaulter needs protection: Because there may be a ‘genuine problem’, due to which one is defaulting on the loan. In a court of law, genuine reasons are given due weightage. It is true that banks will not allow their money to be let go easily. A due course of action will take place. But if one is unable to pay a personal loan EMI (say), this does not make him/her a criminal. Read more about What to do when loan EMI is very high.
  2. Loan defaulter will not go to jail: Defaulting on a loan is a civil dispute. Criminal charges cannot be put on a person for loan default. It means, the police just cannot make arrests. Hence, a genuine person, unable to pay back the EMI, must not become hopeless. There are rules which will help the defaulter to negotiate with his/her lender.

In case you think that your bank is not behaving properly, you can file your complaint with ‘The Banking Ombudsman‘. Read more about it here.

But it must be remembered that these rules are made for those people who, due to genuine problems, are not able to pay their due EMI. These rules are not for careless, escapists, wilful defaulters, and non-law-abiding people.

What a genuine person must know about the consequences of loan default?

What happens if personal loan is not paid in India -2

Types of Loan Defaulters

There are three types of people who default on loans

  1. Careless people: These people are called careless because they took excess loan. They did not analyse their income/expense balance before taking loan. Such people realise their mistakes only after they start paying the EMI. They just cannot afford the EMI expense. Hence the default. Read more about why to become debt free.
  2. Genuine people: These are people who are facing genuine problems. They are people who paid all past EMI’s on schedule. But due to a genuine issue, are not able to pay-back the loan any more. Read more about should you pay home loan early.
  3. Over-smart people: These are people who try to game the banks. They think that they can mislead the bank by giving fake-reasons for non-payment. These people are also commonly referred as ‘wilful defaulters’. These people ultimately gets booked u/s 420 of IPC and may be jailed.

All loan defaulters must first realise that, “loan payment default is not an acceptable practice“. So if one is defaulting on loan, he/she shall not accept a very polite handling of the issue.

But this is only one side of the matter.

People who are stuck due to genuine problems, must also remember that “even the loan defaulters has their rights. Banks cannot simply send recovery agent at their doors to shake them up and show disrespect.

Rights of Loan Defaulters

In this article we will see what are the rights of loan defaulters.

There are RBI’s rules, which all banks must adhere to in handling cases of loan default. This is specially true for handling cases dealing with common men defaulting in small loan like credit card debt, personal loan, home loans etc.

Genuine Loan Defaulter

What Banks can do for genuine loan defaulters? There are rules, and bank’s would do everything within those rules to assist the loan defaulter.

But why banks will help a defaulter? Because it is also in their interest to not allow a loan to convert into an NPA. So what a defaulters should do is to approach the bank proactively and explain them the problem.

As per banking rules, these are the few ways in which banks can help a loan defaulter. In these cases the bank will follow the rules specified as per SARFAESI Act.

  1. LOWER THE EMI: Banks can lower the EMI in two ways: (a) by increasing the loan tenure, (b) by converting non-secured loan to a secured loan. In banking terms it is called as loan rescheduling of restructuring. Lowering of EMI’s due to tenure extension may help few defaulters. But as per bank rules, tenure cannot be increased a lot. As a result, the net effect on EMI reduction is very nominal. But in case of non-secured loan (like personal loan) being converted into a secured loan, reduction in EMI is appreciable. Read more about whether to reduce EMI or tenure in loan prepayment.
  2. ALLOW EMI FREE PERIOD: In cases where the flow of income has been temporarily disturbed, this type of relief may help the borrower. Unforeseen issues like job loss, temporary stoppage in business, operation etc, can be addressed this way. Here the banks may agree to waif-off the EMI collection for a certain period of time (say 3-6 months). After the lapse of this period, the EMI payment must start. Read moe about how home loan prepayment can save lakhs.
  3. ACCEPT A HAIR CUT: There can be a case, where the loan defaulter is in no condition to repay back the loan balance (today or in future). But he is offering to pay a part of the loan. In return for this part-payment, the defaulter is asking the bank to close the loan once and for all. Why a bank should agree for such an offer? Because it is better to get something than nothing. Here the onus is on the loan defaulter to convince the bank to accept the offer. Read more about what it means for banks to ‘take a hair cut’.
  4. FOLLOW SARFAESI ACT: Bank’s will resort to this step only when a loan has been deemed as an NPA. It means, the above three steps has failed. What is SARFAESI Act? The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. As per SARFAESI Act, banks etc can arrange for recovery of their NPA’s without the need to move to the Court of Law.

We will read more about the SARFAESI act in the latter part of this article (see “just unable to pay the loan” below).

What we have seen now, was what best banks can do for the “genuine” loan defaulters.

But the treatment is not the same for other people.

Loan Recovery Agents

Recovery agents are meant for people who are acting smart. These are loan defaulters who have missed their EMI’s, and are avoiding the bank.

In these cases, Bank use the recovery agents to bring the loan defaulter to the negotiation table. But there are few guidelines of RBI regarding the role of recovery agents

In the past, in one of the publications of Reserve Bank of India (RBI) it was mentioned that:

“…engagement of recovery agents is causing serious reputation risk for the banking sector as a whole…”.

Taking a corrective action, RBI revised the guidelines for engaging recovery agent by banks.

There is a clear cut guidelines from RBI that, banks/recovery agents cannot use ‘uncivilised, unlawful and questionable behaviour’ in the process of loan recovery. 

What are the guidelines?

  1. Hiring of professional recovery agents: Banks must do due diligence on the agency before hiring them as a recovery agent. Due diligence shall not only look at the company as a whole, but must also look at people who are involved in the recovery process. The person hired as recovery agents shall pass through police verification. The family background of person in consideration shall also be checked by the agency before hiring. So it means that, if a rowdy (in name of recovery agent) misbehaves, a police complaint can be lodged in the police station. In this case the bank/recovery agency must give clarification on the behaviour of agent with the defaulter. Unsatisfactory reply may result in loss of contract of the recovery agency. Unlawful conduct of the recovery agents with the defaulter is a criminal offence.
  2. First send notices, then recovery agents: Before bank sends a recovery agent, they must issue intimations. In the intimation letter they must first authorise a recovery agency to act on their behalf. Communication of authorisation shall go to the loan defaulter directly from the bank. In case no intimation has been sent, load defaulter can refuse to hear the agents. Recovery agent may self carry the authorisation letter, but this is applicable if past attempts to deliver the letter has failed. Recovery must show the authorisation letter and identity card. In case the agents misbehave, the details of identity card can be used to lodge a police complaint. Bank must also publish the details of recovery agency on their website.
  3. Hear the case of the loan defaulter: Banks must hear the defaulters side of story without a bias. Banks must also issue one more communication to the defaulter. This communication should furnish details of ‘how and to whom’ the loan defaulter can contact in the bank, explaining his grievances. The loan defaulter can then show a copy of discussion with bank, in case the recovery agents further disturbs them.
  4. Recovery agents are Bank’s responsibility: Frankly speaking, it is banks job to undertake loan recovery process in case of default. But RBI has allowed banks to offload the recovery process to a third party. But there are risks when a banking activity is offloaded to a third party. In order to manage the risks, RBI asked banks to provide training to new recovery agents. All recovery agent shall first get a certification, and only then they can act as recovery agents. The training session must explain the “code of conduct & protocol” that recovery agents should practice while dealing with the loan defaulters.

Just unable to pay the loan..

What banks can do when a person is just not able to payback the loan?

In case of personal loan, bank has no collateral. Hence personal loans are called as non-secured loans. In case of personal loan default, banks has only few options:

  • Negotiations: The best bet for banks is to sit on a negotiation table with the defaulter and settle the litigation. This is the most preferred options even for the banks. Why? Because in litigations banks will have to further expend money on the NPA.
  • Use of Post Dated Cheques: But if the negotiations fail, the bank may decide to go to court. But as loan default is a civil dispute, arrest cannot be made. Hence what bank may do it to present the post dated cheques for clearing. If the cheques get bounced, then as per rules, arrest can be made.

In case of secured loans like (Auto, home loan etc), banks can do the following:

  1. Issue Notice: The bank will first declare your loan as an NPA. When a loan becomes NPA? When dues are not paid for more than 90 days. After this, bank will have to issue you a ’60 day notice’ under SARFAESI Act. In this notice period, the loan defaulter can payback the dues and close the case.
  2. Issue Public Notice: In case of Auto loan, the collateral will be like car, bike etc. In case of home loan, collateral will be a residential property. If loan is not cleared within the 60 day notice, bank will issue a 30 day public notice informing about the sale of asset.
  3. Issue Fair Value Notice: Before the asset is sold, the bank must also issue a notice informing about the fair value of asset that is going to be sold (in the public auction etc).
  4. Seize The Collateral: After notice period is served, the bank can immediately seize the collateral (asset), and initiate its sale proceedings.

What the borrower (loan defaulter) can do here? Not much. But if the defaulter thinks that ‘property seizure’ or ‘property fair value’ has not been handled properly, they can raise the objection in written to the bank. The bank is obliged to reply within 7 days. But after the reply, the bank can go ahead and sell the asset as per the public notice issued.

Final Words…

One must appreciate the fact that, Banks/Government cannot be lenient towards the loan defaulters. If they are lenient in one case, then it will be taken as precedence. People will start taking loan default as an excusable crime.

It is essential for a borrower to understand that availing loan is a very serious step in ones life. One must think 100 times before getting into debt. All pros and cons must be studied by the borrow before taking even a penny of loan.

Taking loan is a risk. If loan is small, risk is less. If loan is big, risk is more.

The point is, a borrower must deliberate the consequences of loan defaulting before getting into the loan.

Read more about how to get out of debt faster.

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Disclaimer: The information provided in my articles and products are for informational purposes only and should not be considered as financial or investment advice. Read more.

79 Responses

  1. I have taken loan and credit cards from Banks I have total debt of around 30 lac

    Since I lost it all in share market and betting . I do not have anything and my salary is not suffice to pay to all the bank. Please advise.

    What should I do?

    I feel to do suicide as recovery agent are step my door daily as i am on my job they harras my family to repay the loan right now i m not in the situation to pay them all what should i do please advise .

    Please advise

  2. I have taken loan recently from Banks and NBFCS…I have personal loans from all total amount is 90 lakh.

    Since I lost it all in share market. I do not have anything and my salary is not suffice to pay to all the bank. I can pay only to 4 bank out of 7 bank loans. Please advise.

    What should I do?

    I feel suicide is the option as through insurance I can get and pay.

    Please advise.

  3. Hello Sir,

    I am the victim of cyber prepaid task scam where i have lost 40 lacks that amount i have taken as personal loan from multiple financial institutions like online applications and bank now after 3,4 emi am not able to pay emi and still there is no lead on my fir.please suggest what i can do

  4. I have taken loan recently from nbfc and banks 1 2 months ago around 50 lacs…I have personal loans from family and frnds as well .

    Total 2cr

    Since I lost it all in market and betting. I do. Not have anything and my salary is not suffice to pay all..

    What should I do?

    Can I declare myself bankrupt?

    I feel suicide is the only option as thru insurance I can get and pay.

    Please advise

    1. suicide only make your family conditions worse, do snowball method to payback all loans, if possible consult a sebi registered financial advisor

  5. I’ve a personal loan from one non-banking financial company of around 300000 before Covid but due to job loss and other financial losses i’m not able to make the payment since last two year. I’m ready to settle the account but they have sent an Arbitration letter for the attachment of salary and bank account. My question is NBFC can do that?

  6. Hi Mani, Hi, I had taken loan before marriage in 2019 of 3lakhs, and had a very good credit score and was paying EMI till march 2020 until this corona pandemic started and I lost my job. I even suffered from pandemic and went in depression from continuous calls from Kotak bank recovery agents. I even tried for suicide because of the mental harassment and it was just first yr of my marriage life. My husband moved me to native in fear of my mental condition. And post that we have been asking for time from bank for payment or restructure of loan amount. But no positive response from them. My husband even kept my ancestor property for sale to clear this loan and informed same with recovery agent. But he is not ready to listen and 2days back he arranged some constable and made a call from them saying a case will be filed against my husband and he as to come to station now. Once my husband reach station they have ill treated him and threatened him of beating and humiliated him. And forcefully made him write a promiser letter saying will be paying 2,60,000 in next 6 months(50k each month) and also call came from police station after 2hours asking for 5k amount. My husband is the only person earning for family and I have medical issues (diabetic) and his salary is 27k. How can we pay 50k with this income? Please help me to reduce my stress and because of this my marriage life is being disturbed. And not sure even if my husband gives me divorce because of this situation. Please help me.

    1. I am not sure about this Ambika but 1 thing is for sure that no Police person can be involved in case of Loan Default. they are just trying to harass you but if a police gets involved in this scene, you can file a complaint against the bank. Also they cannot beat or lock up the person as default of loan is not a criminal offence. and plus you are the defaulter so your husband can not even be contacted on this issue. Frankly speaking, they are just trying to take advantage of your fears. Please contact a proper knowledgeable person for this but don’t be afraid. Just know that money is a part of life and not your whole life, someday or the other these harassers will have to leave you and imagine how peaceful you life will become post that. Think of the good days that are to come instead of fretting over the bad days.

  7. my husband had taken Home loan of amount of 42 lakhs from HDFC, he is died 4 yrs back, i tried to pay emi , but now it is not possible. what will happen if i don’t pay loan emi now and property value has decreased.
    if i surrender this property to HDFC bank. they will auction it, but as the value of asset has decreased. total loan amount remaining will not be cleared. will bank try to recover remaining amount from my other asset/ bank account directly?

  8. Very nice article, exactly what I needed. Very useful post I really appreciate thanks for sharing such a nice post. Thanks

  9. I have taken a loan from Aditya Birla of 15Lakhs whose EMI is 32066 I have been paying this for 4 years and in between, I restructured my loan during Covid times now due to my financial situation I’m unable to make payment for the next two to three months I have also applied for mortgage loan till I don’t get it approved I wont be able to come out of this situation Can you suggest what can be done to get rid of recovery people for next 2 to 3 months also can the bank give me a top up or reduce my tenure so till I get back on track I can make minimum payments please advise?

  10. मेरा परसनल लोन है 48 मंथ का 440000 का 8 emi पेड कर दिया हु लेकिन अब मेरी इन्कम बंधन हो गयी है main आगे b चूका पाने की इस्तिथि me नहीं हु
    Emi 14000 की है और मेरी आय गिर गयी है 11000तक तो main कहा से दे पाऊंगा सर ये क़र्ज़
    इसके पहले और b कर्ज़े थे वो टाइम तो टाइम क्लोज हो गया emi पे
    ये लोन मुझे preapproved loan k तहत मिला था
    कोई b हार्ड डॉक्यूमेंबत नहीं दिया था ना कोई चेक सिर्फ
    Ecs mandate हुआ था ac से

    Is इस्तिथि me बैंक क्या करेगी क्योंकि main ये लोन चूका नहीं सकता,🙏🙏🙏🙏🙏

    Main कानूनी पक्रिया b झेललूंगा मेरे पास कोई रास्ता नहीं है

    क्या हो सकता मेरे साथ, क्या हो सकता लोन के साथ
    मेरे सवाल का जवाब देने की कृपा करें सर

    1. Ecs mendate se aapke ecs bounce huye hai to ye cheque bounce jaisa case lagega aap par section 138 me,…lekin agar unsecured hai to ghabraye nahi court me hajir ho jana adv ke sath ya fir aap swayam bhi ho sakte ho,…court aapse chukane ke raste puchhega agar nahi to settlement ka option diya jayega…..jisme aapka cibil prabhavit hota hai aur bhavishya me loan nahi mil pata….lekin option na hone par settlement option thik hai…ya ek se do court hone par direct lok adalat se bhi settlement hota hai jo bina court fees ke hota hai

  11. Dear Sir,
    I need some advice as our house was auctioned on the 15 th of March’2022 by Canara Bank for an amount higher than the default amount.The bank said that the default amount will be deducted and the rest of the money will be credited to our account.
    It is over 2 months now and the bank did not send us any official letter nor did they settle the remaining amount.We had called the main branch and told them that we will need time to vacate but today we received a call saying that the municipality will send us a letter to vacate the premises and the amount to be credited in our account will be settled after we move out.
    I wanted to know what is the legal procedure in a case like this.

  12. Hi Mani,
    I have taken a personal loan from axis bank & i was also having a credit card of sum bank but i am unable to pay my loan & card outstanding from Covid 19 i have may problem like i lost my job in covid due to which i have taken a moratorium at the time of bank declarer for moratorium and my tenure month got change from 60 to 73 month after moratorium end in august 2020 my total outstanding raise after that i have borrow my loan EMI to pay the bank in September 2020 and then i paid in next EMI in November 2020,December 2020 after which i came to my account is NPA then i paid my next EMI on Jan 2021 but still it was same i stop making payment after that i get a call from axis bank that u have not paid your EMI as i ask them that my loan account showing NPA they told that due to three bounce account get NPA and the also said that the moratorium is applied on your account only 3 months i don’t no how but when ever i applied moratorium i use to get successful on website now i am unable to make a payment from jan 2021 my loan amount is raise to high adding the interest by the bank

    loan amount was 298000
    Tenure month 60
    in which i have paid till 32 month total till jan 2021

    and they also put my account in lean
    i told them that i settle the loan in 1,00,000 and i can can pay RS 5000 per month which will help to to clear the loan but they are not ready to so what i can do now please help

  13. Sir My Name is D N.V.M Yesuram, I take HDFC jumbo Loan 1 lakh 60 Thousand, Every time i paid my emi In before date But sept 24 2021 my father expired, after i loss my job then i am searching job but i am till now not get job, loan recovery agent & legal department calling me every time i answered his call, to be frank i dont have money for pay EMI, I requesting Them & also i begging them but they would not understand my situation And agony, i also informed them once i get my job i will pay my emi, but they Using Like this kind Of words (Otherwise attend in court with your family and in future you won’t get any loans, Hello are you eating food or grass ,you won’t have any shame that you used public amount and cheating the public ,you have any commonsense you would be replied to the earlier msgs ,if you have intention means you will update the payment now itself, You won’t get job We updated as defaulter in all bank records and legally it was updated You won’t get job you know that,Really you all are died I think so or otherwise ypu are blind and Def) Please help Me sir

  14. my husband took personal loan of rupees 2 lakh we have been paying our emi correctly but because of lock time period we were unable to pay emi for 6 month my husband lost his job we have two small kids we are suffering for food in this time how come we pay pay the money the bank person keeps on calling and giving mental torcher for to pay the emi but for our full due year more than for 1 and half year is balance what can we do i am full blank mined please help me sir

  15. Hi Sir i have taken personal loan 10 lakhs from HDFC bank and i have taken more than 3 lakhs from credit cards and some other application loans. Now i am unable to pay single EMI also. For last one month now i need to face any necessary action from bank. can i take 3 to 6 months of time to pay continue EMI. Can u please suggest me better option to repay my EMIS.

  16. Hi sir,
    I took 11 lakh loan to help my brother, who was working and believe that he can get out from probles and payback EMI on-time.but due to COVID 19 March 2020 my brother lost his job and I have paid EMI about 9 months, because am working and managing to pay. But my job was also lost now last 8 months EMI pending nojob found till now.i don’t know when I will get the job. Benk people are trying to meet. Due to fear iam not able to connect with them.
    Pls guide me with right advice. Because this loan took for my brother and he also not paying me since more than a year.
    I cannot pay his amount , because I have family to look after.

    1. It will be converted in NPA after few months after that you will receive notice but don’t entertain notice be silence it will automatically over but you will never get a single loan in future. As your civil score will be crashed.

  17. Hello sir, I got sanctioned education loan, Now I am unable to pay the EMIs, because, I did get any job. What should I do?

    1. सर,
      यदि किसी व्यक्ति ने पर्सनल लोन लेकर
      किसी कंपनी को ऑनलाइन ट्रांजेक्शन द्वारा दिया हो और बाद में कंपनी उस व्यक्ति को कंपनी से निकाल दे और ईएमआई का पैसा न दे तो क्या करें?

  18. Greetings to all. I having 42000 to pay my outstanding in SBI bank they trying to seize the vehicle. I payed 10000 and asked little time but even that they trying to seize the vehicle. Because my business is up and down.
    I trying to pay 5000 per week. Because my EMI is 13000 per month.is any solution please I need help tips

  19. HI sir, i have taken some payday loans from apps for 2months i have good repayment history with them but due to some problems i didnt pay on time for the first time but collection team has called to entire my phonebook and used abusing words and they have created whatsapp group and doing social harrashment we are in very much of stress because of these recovery procedure and ever they used kids photo in whatsapp group i have all proofs against them please suggest me what can i do to come out of this sir please

    1. Hi,

      By observing all these situation now I am ready to avoid taking loans in any situation. can you please let me know how to avoid this.


  20. sir,,my son taken a personnel loan of nearly 38 lakhs from three different banks..and had four credit cards..about to become default..I had sold my personnel assets and repaid nearly 24 laksh..now i became helpless..He had neither ancesteral nor his own property..I with my own earning had a house in hyderabad in the name of my wife..I had one more son also..my question is is there any danger to my house in hyderabad with all these loans/credit cards..please clarify..

    1. sir i just saw your problem, what happened with your later please let me know same problem i am facing now,please guide me how you faced this problem

  21. Hi guys I need some suggestions from experience guy,please give me a some tips because iam getting frustrated day by day due to the reason of loan which I haved borrowed from some small app like my bank plam cash etc,of amount rupees 7000,2000 and less from many
    app.due to some medical problems I have brought that money,at a first time i have only brought a cash of three thousands the app disburse me around 22hundred with high intrest for six day so due to my health problems I was unable to pay that amount till six days so then after again I brought some amount from some other app they borrowed me in a same way which I have paid for 1st one loan app now it is increasing day by day coz iam getting late to pay in given time and it is getting increasing day by day so any solution for it,so iam still under medical treatmeant and it is still in pending which I am getting call day by day to repay.And getting threatened to call my phone book numbers.

  22. i have taken personal loan on 2017 for 5.40lac now they made it 6.10lac i have paid 29 Emi each 17605 ,and i am jobless from march and got married to in 2019 so many responsibilities now i am not able to pay the Emi now they are calling me and threatening me axis bank .what should be the right way to deal with them.

  23. Hi. Due to lockdown my business is completely collapsed, am not able to pay personal loan emi’s and credit card bills. Collection agents are continuously calling for payment. Some times my brain not working properly with financial tension. Kindly give best option and suggest me how to face this problems.

  24. I borrowed a personal loan in april 2019 for rs.1,00,000/- the tenure of this loan was 48 months. after taking the money i lost the job some critical situation thereafter. however i paid 3 months of emi then hereafter mother health was so serious at that time,after that i didnt paid for till date im promising to sbi manager i will clear it off whole payment within 5 months because of lockdown there is no jobs in this period and allowing into the company,i was clearly explaining to sbi branch manager he was threatening me to pay immediately 1,00,000 whole amount otherwise you will file as criminal case and go to jail… still i have an tenure period sir surely i will clear entire amount because i need my credit score he was not understanding the situation and is this necessary time to speak with the customer at 9pm night from sbi prabhat nagar chaitanyapuri branch manager and he mentioned the name is B.SRINIVAS,Till now i was very tensed bcoz no job and no salary… please give me a helpful advice about this case sir,Thanking you

  25. Hai can any one help me with this , i took some of the loans for my study and for maintenance , some of the personal issues i have not paid loans , though i am preparing for some government jobs ! After getting some jobs i would like to pay all the loans ! Because of loan defaulter , i ll be denied for jobs ? Orelse i can able to apply for government jobs

    1. You can surely apply for the job, they don’t check your financial background, just that you shouldn’t be having any criminal case against you.

  26. Hello Sir i am Rahul and I was taken loan from some nbfc like quick cash,gold bowl etc. Due to some medical urgency I wasn’t payment on time for that I requested to them about time period but they didn’t respond to me and called to my relatives for asking of emi please help me what can I do?

    1. Same situation to me also they are blackmailing abusing harassing to all my contacts relatives how can I survive in the matter please any one help me sir

    2. I’m facing the similar issue, they have shared my pictures my daughter’s pictures to every one calling her me as fraud.

  27. what about nbfc ? there collecting higher then ever, for ex: they give sum of 1800 and collecting 2550 for just 6 days, what about hhis? if we cant repay on time then they threatening and calling to all personal contacts and mis behaving , what to do?

  28. Namesta sir,

    Ours is join family we live in same home from past 50years, 3 brothers own this property but elder brother had taken money from one of the financer keeping this property and he passed away. Know the property is taken by financer and he took home loan from bank and stopped paying emi, know we received notice of 60days time period to pay loan.

    What can we do in this situation…
    You advice will help us out ….

    Thank you.

  29. I borrowed a personal loan in november 2018 for rs.2,02,000/- and gave it to my friend. the tenure of this loan was 36 months. after taking the money she fled and is untraceable till date. however in january 2019 i made a payment of rs.1,00,000/- . the tenure was shortened to 16 months from 36 months. i was paying the emis regularly till june 2019, but due to huge business loss i am unable to pay from june.i requested for a one time settlement, asking for discount on the principal amount but still the amount offered by the finance company is too much for me to pay. the collections manager flatly refused to accept my offer for one time settlement and said that he will proceed with the legal proceeding.in the court, he said i will have to pay the entire amount plus damages plus judiciary costs.moreover he also threatened that he will submit my pdc and lodge a criminal complaint for cheque bouncing. kindly advise.

  30. Hi sir im pawar i was taken a loan from stanfish but due to some reason i have not paid Loan emi .and i have never share my family , Friends and relative number . but they are called my all relative number and friends number and ask to pay Emi loan.Is it permissible for them to do this? I need to do a police complaint for that.

      1. Sir I am unemployed since September 2019 and am 42 years old (female) hunting for job. I had taken personal loan previously and never missed payments for about two years. Then the executives kept offering to topup the loan and preclose the existing one. Since I wanted funds for medical reasons, I used the offer. Just seven months into this topup loan, I lost my job and could not pay since February 2020. And due to pandemic I could not find a job. In the meanwhile I have faced the worst financial disasters. Starving, rent not paid since 6 months, could not get diabetic medicines for parents since 6 months, selling household items to meet basic needs. Amidst this there is death in the family. I have been calling and emailing the bank about my tragic situations. But HDFC BANK is not helping. Instead they are harassing us mercilessly for payments. Please advise what can be done until I get a job.

  31. One of my clients borrowed Rs. 65000 from PNB against KVP (Face Value 75000/-) in 2006. After 13 years the bank has sent a reminder to my client that Rs. 85000/- is outstanding against the loan availed. Although bank realised Rs 124000 from KVP and never reminded my client about any outstanding, now all of a sudden sent the outstanding reminder. Is this not a case of cheating by the said bank?

    1. Loan payback is the responsibility of the borrower. Banks can remind if they like. But since this was a secured loan, banks care less. Nevertheless, loan closure procedure needs to be done by the bank. Your client should visit bank premises to formalise loan closure.

  32. I have a question. There are many financial services companies providing loans to students. What if the student fails to payback the loan amount. Let’s assume the loan amount is 10000 and student has taken personal loan without any collateral and cheque.

    1. Student loans are issued against a guarantor. If the student fails to pay back the loan, the liability will be on the guarantor.

  33. Res.sir I take a loan 2Lakh in 2017
    With out give any check (transection base in Account) by Induslend bank .I pay 6 EMI only .what do bank with me now because it’s unsecured loan

  34. In my experience once you are a defaulter immediately you become untouchable for credit agencies (NBFC/Banks) it should be but it is very bad situation for a genuine borrower. In my case i had taken a lot of loans whether it is personal car or consumer durable, in the recent year i went unstable and stuck in debt trap my car loan went overdue for 3 months and I managed to pay EMIs but still 3 emis are outstanding my cibil is effected from 780 to 680 outstanding amount is not so huge compare to my EMI vs income ratio but the thing is all loans need to be consolidated at one place. But due to different financial agencies no one ready to take load on them everybody is trying to keep me away. If i try to know any way a simple answer is repay overdue and continue EMI payment on time for 6 months then your application can be considered it is very simple way but what to do if a person is stuck but ready to repay. i hardly find any competitive agency from government or any private firm who can give hand to pull out the borrowers and such situation will help loans to be converted into NPA unintentionally. I hope our experts can say something on this issue. and may guide me to get out of the situation.

  35. Amazing tips,thank you for sharing this loan post really this is awesome tips for guide as loan.

  36. Hi,
    Kindly help me to understand if without prior notice bank can put lien to the account for 18 years old personal loan?

  37. I have taken a personal loan and quarter dues are paid, after that i got married and husband is not aware of the loab story , and he will never ready to take that burden as he is not rich so. Parents also very poor. My dues are pending for last 5 years. They have some post dated chqs of mine. I am afraid what they are going to do.

    Please let me know what action bank can do on me.

    1. It depends on the type of loan:
      – In case of home loans etc, the co-borrower or loan guarantor is responsible to clear the dues. If they are not able to pay the dues, the lender can legally seize the collateral.
      – In case of personal loan, there is not much lenders can do. Legal heirs are obliged to pay-back the unpaid dues.

      1. If borrower is not pay his emi in case bank has to right to cut gurantors account
        Without any information


  39. Hlo i am unable to pay my personal due to left job.. But i was regular payee of bank but now i am unable to pay. I have also make a call to HDFC customer care for increase my tenure but they denied… Plz suggeste me

  40. NO Bank follow RBI rules. RBI also know this. Gangsters appointed for Recovery in Pune. They directly come to your home with arms. If complaint to RBI, nobody take action. Better way not deal with bank. Not for loan and not for saving. Earn and Eat method. No Bank Relations in all life is better solution and Happy Life.

  41. Hey, Thank you for taking the time to write this. I have to start blogging again soon ugh.

  42. Does civil gets wiped off after 7 years like it happens abroad…or it still stays in ur credit score pls answer

  43. This is very informative on personal loans.I am interested to know about these Bad credit personal loans guaranteed approval 5000,hoping to succeed and avail personal loans.Good learning, thank you.

  44. Good to be here, very informative post.Thanks for sharing this.I am interested to know about these loans services to get a loan for my business, hoping to succeed and avail Merchant cash advance loans.

    1. Personal loan is a non-secure loan. If more than 3 EMIs has been defaulted, the borrower is treated as a “loan defaulter”. In such cases, the post dated cheques (PDCs) may be encashed by the bank. If the PDC’s gets bounced, here it becomes serious, as cheque bouncing is considered a criminal offence. The leagal team of the lender will take the borrower to the Court of Law.

      1. Hi Mani,

        It’s a very useful article. I, however, would like to know the possible consequences for the following situation:

        My wife took a Personal Loan of Rs. 4.5 Lakhs in Nov 2017 from Yes Bank, when she was doing a job. For an year, all the EMIs were paid on time, and then due to post maternity issues, she was unable to join back office and now she is not getting paid. She might soon lose her job, too. She is not in a condition to join another job right now, and it’s a genuine issue for us.

        I have my own Home Loan and other liabilities from which I can’t take out a single penny to repay her loan. If it was under my control, I would have done it. I am neither a guarantor nor a co borrower of her PL, by the way. The condition is such now that we can’t afford to pay any amount to the bank as of yet. She contacted the bank and asked for an extension of EMI, but the bank is not ready to provide any such thing. They are asking for the EMIs to be repaid on time.

        As of now, only one EMI has been missed. My wife sent E-Mails to the bank and spoke over phone, informing about all her genuine problems, but the bank seems to be rigid in their terms, i.e., to get all the EMIs on time.

        The bank has got three post dated cheques from her at the time of disbursing loan.

        What We can do: At max, as the current situation is concerned, we can sell whatever little gold we have, and my wife can withdraw her PF (it will take some time though), however, the accumulated amount won’t exceed 2 Lakhs under any circumstances. We can only offer that completely accumulated amount to the bank for a settlement.

        My question: In this scenario (which is completely genuine), can the bank still issue post dated cheques so that they get bounced and then file a criminal complaint against my wife? We are worried about our new born child, who is not even a year old now, and he must be taken care of by his mother.

        Can she file bankruptcy? If she can, will it help? What are the procedures?

        What is the best doable thing at this situation? To reiterate, it’s totally a genuine situation and we definitely are not trying to escape or be oversmart with bank.

        Your answer will be very helpful at this situation. Kindly help.

  45. The last step is, banks taking possession of the Security.
    In case of personal loan, there’s no security against Loan then what?

    1. I have personal loan 6lac I’m paid emi in always correct time last 3month I’m not paid emi because I was suffering for my exident loan recovry men come to my home but I’m not Abel to pay any emi because I’m not Abel to pay emi I’m belong to poor family what I do please sir rpley

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