Consequences of not paying home loan EMIs | Fusion - WeRIndia

Consequences of not paying home loan EMIs

Consequences of not paying home loan EMIs

Home loans are a common problem for many people. They last for a very long period and can be quite stressful financially sometimes. When you are going through a financial emergency, you might end up with a probability of a default on the loan. If you are unfortunately in a situation where you cannot pay your home loan, here are the consequences of it.

Skipping EMIs

It won’t be a problem if you have defaulted on the first few EMIs. However, if you defaulted three consecutive EMIs, then you will likely face problems. After that you will receive notice from financial institutions. At this point, you should reply and make sure that you bring regularity to payments. You should clear the outstanding within 60 days from the receipt of notice.

Confiscation of property

If you end up not settling your outstanding even after this, the bank will have the right to confiscate your property. The banks have this right because of The Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act.

Auctioning of property

If you cannot come to an agreement with the lender after this, your property will likely be auctioned off.

Generally, if you are in this stage, the lenders would also likely want to negotiate. If no agreement is reached at this stage, do your best to make sure your property gets auctioned at the highest price possible.

If the auctioning earns more money than what you owe for the bank, you will get a refund of the excess amount. When you are conducting these transactions, make sure you maintain complete transparency with your banker.

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