Do you know ? If a person has taken a loan then who will repay it after his sudden demise? know the rules
Due to the Corona epidemic, lakhs of people have lost their lives in the country so far. Due to the death of the earning person in many families, they are facing tough challenges at the economic level. There are many such families in which the deceased has left behind the liability of home loan or credit card. Now a big question in the mind of these families is about who pays this outstanding money of the bank. Does the heir have to repay the rest of the loan or is there some other rule?
How it will be paid after the death of the person taking the loan in the bank or other institutions mostly depends on the category of the loan. Its rules are different in home loan, then action is taken differently for personal loan. According to experts, while recovery is easy in the case of home loan and auto loan, it is a bit difficult to recover in the case of personal loan and credit card loan.
That’s why you have to understand according to each loan, who pays the loan after the death of the person with the loan? Let us know what are the rules related to loan after death and how it can be repaid.
This is the rule in home loan
Home loan tenure is generally longer. Banks, while giving this loan, keep its structure in such a way that even after the sudden death of the person taking the loan, there is no effect on the recovery. In most of such cases, there is also a provision of co-applicant who is a member of the family of the borrower. After the death of the person taking the loan, it is the responsibility of the co-applicant to pay it.
Apart from this, in many banks, an insurance is done at the time of taking a loan and if the person dies, the bank recovers it through insurance. So whenever you take a loan, you can ask the bank about this insurance. Apart from this, they are given the option to repay the loan by selling the property. If this does not happen, then the bank auctions the property kept in lieu of the loan under the Sarfaesi Act and recovers the outstanding amount of the loan from it.
What are the terms of personal loan?
Talking about personal loans, these are not secured loans and they are kept in the category of unsecured loans. In case of personal loan and credit card loan, banks cannot recover money from any other person after death. Also, the successor or legal heir cannot be forced to repay this loan. In such a situation, with the death of the person, this loan is written off, that is, it is put in the discount account.
These are the rules of auto loan
Auto loan is a kind of secured loan. If the person dies, the bank first contacts the family members and asks them to pay the outstanding loan. If the family of the deceased person does not agree to this, then the company can take possession of the vehicle and auction it to recover its outstanding amount.
