If Suddenly your job goes away, your business is stalled, or you face any other financial crisis so that you are not able to repay the EMI of your loan, then there is no need to panic. By adopting some methods, you can get out of the debt trap. It is important to remember that taking a second loan to repay a loan can be implicated in the vicious cycle of debt, so it should be avoided. Let us know what steps should be taken when you are not able to repay the loan.
Ask for time from bank
If you are not in a position to repay the loan for some reason, first contact your bank or NBFC from where you have taken the loan. Inform them about your situation. Either through email or go to the bank branch and meet the officer of the loan department. Request relief from the bank for some time in EMI payment. Explain them clearly how long you are unable to repay EMI. The bank will assess your situation and decide whether you have to give extra time or not. They may agree with your requested period (eg 1 year) or give less time.
Get loan restructured
If you do not have enough money to repay EMI, you can request the bank to restructure your loan. The amount of EMI usually decreases in restructuring, but the loan repayment period increases.
For example, if you took a loan of Rs 5 lakh for 5 years and paid EMI regularly for 3 years, the bank can extend the duration to repay the balance in terms of economic difficulty, which will reduce your EMI.
Get balance transfer (bt)
Many banks allow you to transfer balance to your existing loan. Under this, banks provide you with a new amount of large amount of loan, which can be used to repay your old loan and get additional money. This extra money can help improve your financial condition. Some banks also offer loans at low interest rates than old banks, so choosing such banks can be beneficial for Bt. Balance can be transferred to both loans and credit cards. However, note that some banks do not include loans taken from NBFCs in BT.
Get loan settlement (One Time Settlement)
If you are not paying EMI despite repeated contacts with the bank, the bank can give you the option of settlement, which is called One Time Settlement (OTS). In this, the bank does not demand the entire dues of your loan, but usually accepts a lump sum between 10 and 50 percent and waives the remaining amount. Most of the banks give about a week to pay the settlement amount. By understanding these measures and taking appropriate steps according to your situation, you can manage your loan even during the time of economic crisis.
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