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.