If you are unable to repay your home loan, will the bank snatch away your house or will the defaulter get a reprieve before the auction? Know the rules

In today's era, most people buy their home by taking a home loan. While taking a loan, we think that we will easily keep paying the EMI, but sometimes a sudden financial crisis comes in life like losing a job, or getting sick, then it can be difficult to pay the EMI with your limited income. In such a situation, the fear starts haunting you that if you are unable to repay the loan, will the bank snatch away your house? Will the house be auctioned immediately? If you also have such questions in your mind, then understand here what the bank does if you are unable to pay the EMI of the Home Loan, when does the auction take place and what you can do in the meantime.

If the first EMI is missed, the bank does not take any action against the customer immediately because they consider it to be the customer's mistake. When the customer does not pay the EMI for two months, the bank sends them a reminder. This is a warning that your installments are due. The bank wants you to solve the problem.

If the borrower does not pay EMI for 3 months (90 days) continuously, then the bank considers your loan as NPA (Non Performing Asset). After this, the borrower is considered a loan defaulter.

No. The bank first sends a legal notice to the home loan defaulter and gives him 2 months (60 days) to pay the outstanding EMI or settle the matter. This is another chance for the defaulter to fix everything. In the meantime, if you want, you can talk to the bank, talk about reducing the EMI or restructuring the loan.

No. After being declared an NPA, the entire auction process can take 6 to 7 months. During this time, you can find a solution and save the property from being auctioned.

If no solution is found even after giving so much time, then the bank takes possession of the property and then fixes its price and issues a notice of the auction date and rules.

If you feel that the property has been undervalued or the auction process is not fair, you can challenge it in the bank or in court.

If the bank gets its dues by selling your property and some money is left, then the bank returns that money to you. You have full rights over that amount.