Loans allow you to pay the money taken in simple monthly installments with a specific interest rate unto a set duration. However, there might come a time when you may face hardships such as bankruptcy, joblessness, accident, health problems. When such a situation arises, what happens when you are unable to repay the loans?
For any kind of loan, including a car loan, the banks and lending institutions will check with you by email or letters if you even break a particular payment. As a borrower, you can indeed address the bank or financial institution and explain the issue of not making the payment and asking them to restructure the terms of tenure or interest levied on the loan. Failure to pay the loan for longer than three months may prompt the Bank or lending company to apply for judicial proceedings against you. The overdue will also draw default interest, which may lead to a burden over time.
The particular bank or lending company will send the credit-related data of the loans you take to the credit agencies. Default made on payments will harm your CIBIL credit report and reduce your chances to avail of a loan in the future.
The inability to pay your auto loan will force the banks or the particular financial institution to take possession of your automobile. So, be sure to check the car loan EMI calculator facility available on various bank websites, including ICICI car loan. This facility will help you decide the monthly payments you are comfortable with.
Do not feel afraid to approach your bank and notify them about your incapacity to repay the loan. The bank or lending institution will recommend to you the possible ways to clear your liabilities. You can ask them to decrease your EMI and increase the period of the loan.
Conclusion:
You can apply for your loan settlement when the interest accumulated on your loan is far greater than the principal amount. Nonetheless, it will show on your CIBIL credit history and influence your credit score. A resolved loan account is not recognized as closed by the lending institutions, banks, and credit bureaus.
Immoral treatment by the bank or financial company is illegal, and a customer has the right to be heard and shown respect. You can also seek legal help from a lawyer when you are forced to face the trial for repossession of your property.
Before you purchase any loan, make sure you can cope with your repayment method with your current income in mind. Moreover, the situation may become tricky in the future. Do not make any unnecessary expenses until you have paid your loan in full.
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