Upgrad LLM

personal loan and credit card payment default


I live in a Tier 1 city and I currently owe 2 banks a personal loan of 5 lacs each. I have currently lost my job and I have spent all my savings in paying off the EMI for last 3 months. I'm in midst of selling my owned house (residing) and will be pre closing the loans with the capital gains and would be using the balance amount to buy another house in Tier 2 city (moving to another city). 

I'm anticipating that my house will be sold in next 2-3 months, however I would not be in position to service the EMIs of my 2 personal loans and dues of my 3 credit cards.

My questions are

1. Does the bank have any authority to stop the sale of my house or Can bank takeover my house for not paying 2-3 EMIs of personal loans?

2. Do banks give 2-3 months time to individuals to get their finances in order?

3. To whom specifically in the bank should I inform about this situation. Would informing a phone banker, collection agent suffice?


PS: I have never defaulted to any loan EMI or credit card payment in the last 8 years of my earning life. This is the first time my finances got derailed and I have all the intentions to meet my payment obligations, including the late payment and interest.


Thank You,


Any delayed payment shall be recorded as delinquency in your credit history with credit bureaus like CIBIL.

Hence first suggestion is that thru whatsoever means to pay the EMI and keep your credit history clean so that your creditability, loan taking ability is not affected in future.

Any rescheduled arrangement/settlement may also be recorded by banks as adverse entry and it may be repelling for lenders.

Until or unless you succeed to obtain in writing from banks that such arrangement shall not affect your credit score/loan taking ability and bank shall keep your credit history clean………………………….you must not believe verbal assurances even if you record the calls.

The CC dues/personal loan are unsecured debt hence bank can not stop the sale or takeover………………………………….until or unless you have pledged your house as security in so called personal loan.

It shall be appropriate to avail the services of a lawyer handling such cases/consumer cases/banking matters/debt related matters and show all docs on record for a proper opinion………………………..and to understand the merits in your case.






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