The first thing you have to understand that bank would not foreclose the loan even if you defaulted on one or two EMI payments. In fact, foreclosure has always been the last option which banks want to exercise. But yes if you continue to default for 3 months then there is a high probability that bank will seize your property. Banks have their set procedure in such cases. They don’t bother you after the first EMI default, but when you don’t pay 2 EMIs consecutively, they will send you a reminder to pay. It is only after 3 consecutive months of default that banks treat the loan as NPA. Thus after 3 defaults banks can enforce, “The Securitization and reconstruction of financial assets and Enforcement of Security Interest act’2002” ( SARFAESI)” and start the process of recovery of property/dues. After three months bank will send you a legal notice and ask you to repay the dues.
If you don’t repay at this stage too, then after two months (i.e. five months from the first default) bank will send you to notice that it has valued the property for a certain amount and will be auctioning the same. Auction date is set for generally 1 month after the date of the notice.
You have to understand that bank itself does not want to go through this cumbersome process of auctioning and wants to settle things as soon as possible. If you look at the process, then banks give sufficient six months of time before auctioning the house. Within these six months, you can approach anytime and try to settle the things out with the bank.
Personal Loan: If you Can’t pay your Personal loan then the days of trouble is started for you. Basically personal loans are an unsecured loan that means you don't have to provide any security so the bank can’t seize your property to recover the loan amount. Initially, Bank or lenders give you a time span to start repaying your loan but in case that limit is overpass then a bank will take a legal action and file a case against you under section 58.
So, in this case, the best thing that an employer can do is, talk to your lender and ask for 10 or 20 days of relaxation then start repaying your personal loan as soon as possible.
If you are thinking about taking a new personal loan and you are afraid that what will happen if you failed in paying off a personal loan. In this case, I have a personal suggestion Just choose an NBFC to take a personal loan over any bank. Because NBFCs are quite flexible in these type of cases.
If you don’t repay at this stage too, then after two months (i.e. five months from the first default) bank will send you to notice that it has valued the property for a certain amount and will be auctioning the same. Auction date is set for generally 1 month after the date of the notice.
You have to understand that bank itself does not want to go through this cumbersome process of auctioning and wants to settle things as soon as possible. If you look at the process, then banks give sufficient six months of time before auctioning the house. Within these six months, you can approach anytime and try to settle the things out with the bank.
Personal Loan: If you Can’t pay your Personal loan then the days of trouble is started for you. Basically personal loans are an unsecured loan that means you don't have to provide any security so the bank can’t seize your property to recover the loan amount. Initially, Bank or lenders give you a time span to start repaying your loan but in case that limit is overpass then a bank will take a legal action and file a case against you under section 58.
So, in this case, the best thing that an employer can do is, talk to your lender and ask for 10 or 20 days of relaxation then start repaying your personal loan as soon as possible.
If you are thinking about taking a new personal loan and you are afraid that what will happen if you failed in paying off a personal loan. In this case, I have a personal suggestion Just choose an NBFC to take a personal loan over any bank. Because NBFCs are quite flexible in these type of cases.
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