Consequences You May Face Upon Non Repayment of Home Loan and How to Avoid the Same

The property rates in today’s time make it next to impossible for individuals to buy a house on a full down payment. Home loans have become an inevitable part of the process of investing in a property. Not only does it allow the buyer a comfortable living but the tax benefits attached to home loans such as Section 80C and Section 24, provide the investors an advantage by choosing the loan route. 

However, home loans have a flip side to them as well. Even though they make you comfortable for buying the house, home loans become a long term liability that needs to be catered to appropriately. A liability of this magnitude and seriousness can be turn out quite troublesome in an uncertain environment of no job security and health issues arising from a sedentary lifestyle. The trouble arises when you overestimate your future income or miscalculate your expenditure or some unforeseen unfortunate event that you have not catered for occurs. You might have invested in one of the luxurious flats in Thane but due to hard luck, fall back on your loan repayment. Let’s take a look at some of the repercussions of not repaying your home loan on time. 

The first thing to understand is that defaulting on one or two EMI payments will not lead to foreclosure of the loan. However, if your default continues for more than 3 months, there is a high probability that your property will be seized by the bank. After the third month of default, the bank considers the loan as NPA. Post this, the bank starts the process of the recovery of dues or properties. 

In order to avoid a situation where you have to deal with the bank formalities, there are some steps that you can follow. Financial distress can be avoided by making wise decisions while taking a loan and planning your finances accordingly. One of the thumb rules of repayment of the loan is that the monthly outflow of the EMI should never be more than 50% of the household income. The loan tenure should be kept as short as possible to avoid higher interest payments. The quicker you get done with these monthly payments, the better you can plan your future. It also gives you the freedom to invest further and raise your profits.

The inability to pay an instalment also affects your credit count, impacting your credit profile. This might become a problem when you need help in the future. The borrower should also keep track of the interest rates and market trends to make a wise decision in terms of home loans. Prioritization is a must when it comes to loan repayment. If you are planning to buy a nice, lavish apartment for yourself in or around Mumbai or a 2BHK in Ghodbunder Thane, you must check out the properties by The Dynamix Group. Their properties are not only designed by the best architects and planners but are also available at budget-friendly prices.

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Created on Nov 2nd 2020 05:08. Viewed 260 times.

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