How to Deal With The Loan Recovery Process

The loan recovery process in India might seem clear and straightforward on paper, but it is only when you have to face it that you realize how complicated things are. The loan is usually considered bad after it has not been paid for three months consecutively. The bank or the lending institution usually calls the creditor during this time to enquire about the reason for non-payment. 90 days after the due date, the debt settlement agency appoints recovery agents. The details of the recovery agents are provided on the lender’s website as directed by RBI. It becomes the duty of the borrower to verify the genuineness and authenticity of the recovery agent. Then begins the process of loan recovery by the agent.

Get a Debt- Relief Company Involved

A piling up loan could be a very daunting situation. Therefore, it is important to keep cool so you don’t fall into any more problems. If at any point in time you feel that you can’t handle it on your own, get a debt-relief company involved. 

These companies are experienced in the debt relief area and know the loan processes inside out. Their expertise in the loan settlement service can make the entire process very smooth for you. 

There are debt-relief companies that have special programs to protect their clients against harassment from creditors. Freed, for instance, has a Creditor Harassment Protection Program (CHPP) that aims at providing pre-litigation assistance to all FREED customers. It offers them protection against unlawful collection practices from creditors and their associates.

However, even with the debt-relief company involved, you should have a sound knowledge and understanding of your rights to protect yourself from any harassment.

Know Your Rights

RBI has issued the following guidelines to promote courtesy and fair treatment to the debtors in the situation of a loan default:

1. As a borrower, you have the right to be contacted at the place of your choice.

2. You have the right to know the identity and authority of the representative in the first instance.

3. As per the guidelines, you can only be contacted between 7 am- 7 pm by the recovery agents. 

4. You have the right to document the time, the number of calls, and the content. 

5. You can request to avoid calls at a particular time for genuine reasons. 

6 . At all times during the course of loan recovery, your privacy has to be respected.

The best thing to do in the situation of loan default is to consult a debt-relief company so that you are able to take control of things and prevent the situation from getting worse. A loan settlement consultant doesn’t always lead the settlement process on your behalf but can counsel you on how to take things forward. 

Bottom Line

There are multiple methods and assistance provided to the debtors to get out of a debt trap. All you have to do is maintain your cool and analyze the different options to see what works for you.  With the proper knowledge and assistance, what seems complicated and strenuous can be finished smoothly.