Repaying home mortgage loans is a long-term commitment and requires a substantial amount of planning. When choosing to borrow money by pledging your property, use a mortgage loan calculator, find the best mortgage loan interest rate, and have a sound repayment plan in place to create a hassle-free borrowing experience. This, coupled with choosing the right tenor as per your financial standing and monthly cash flow, can make repayment effortless.
Take the help of a trusted mortgage loan calculator, to see the exact amount payable and plan your expenditure after comparing offers. Loan Against Property also offers you substantial loan amounts of up to Rs.3.5 crore at reasonable interest rates along with benefits like minimal prepayment and part-prepayment charges, online account management and a Flexi Hybrid facility that enables you to borrow as you need or even choose interest-only EMIs.
However, sometimes your plans may not come to fruition, and you may default on your loan repayment. In such cases, lenders do not have the right to instantly seize your property. There is a procedure that lenders have to follow while taking action to recover their money and you are entitled to certain rights.
Choosing the right EMIs by using the loan against property EMI calculator will help you avoid financial hiccups during your loan repayment phase. Here are 5 rights that you are legally entitled to despite defaulting on your loan against property EMIs.
You get a 90-day Notice Period
Lenders have to follow procedures and legal guidelines if you fail to pay your EMIs before they can claim and sell your assets to reclaim the loan amount. If your EMI repayment is overdue by 90 days then your lender must issue you a notice, which classifies your residential or commercial property as a non-performing asset. If you cannot repay the amount your lender has to issue another 30-day public notice with details of the sale such as price, date and, time of the auction, before selling your property to recover the home mortgage loan amount.
You have a Right to the Fair-Value Auction of your Property
If the 60-day notice period passes and you cannot repay the amount, your lender can issue another notice and sell your property. However, you can object should the valuation report undervalue your property and you can bring in a prospective buyer with a better offer.
You get the Balance Amount after Recovering the Loan Value Belongs to you
Your lender only has the right to sell off your property in order to recover the balance of the loan amount issued. So, you should track the auction and present a buyer that offers a better price, if possible. By selling the property at its maximum price, you are liable to receive the balance amount after clearance of your debt. Given the constant change in market prices over the years, your property is likely to fetch a higher value depending on factors like location, amenities, builder name, maintenance, etc.
You have a Right to be Heard
While serving the notice period, you can object to the repossession notice and the concerned officer needs to respond within 7 days. In response, the concerned person needs to provide valid reasons if they reject your representations and objections. So, make yourself heard before your lender so that you both can strike a solution that works for both of you.
You get Human Rights
There are a certain set of best practices that organisations have to follow when they send a recovery agent or representative to you as a borrower. You can choose where to meet the agent and maintain your privacy during these meeting.
Now that you are aware of your rights you can get the most out of your property auction if the situation demands it. To have a better experience, make sure to borrow only when you can guarantee repayment.
By Alisha Antil
who is a financial advisor and have vast experience in finance and loans segment.