Personal loan taken from bank without surety, what happens on default?

[Anonymous]

I had taken a personal loan from HDFC bank of Rs. two lakhs. There was no surety for this loan. I was regularly paying the instalments for about one year, however right now I am facing some problems due to financial hardships. Two monthly instalments are now pending for payment and the bank has sent me a notice. What action can be taken by the bank against me if I am not in a position to repay the loan due to financial hardships keeping in view that there is no surety for this loan?

[Dr. Ashok Dhamija]

The bank may file recovery suit against you for recovery of the loan amount due along with the interest. Some of the banks are also notorious for using strong-arm tactics by using goons to recover the loan amount; so, beware of that.

It may be advisable for you to continue repaying the instalments and/or negotiate with the bank for one-time settlement of the loan along with interest.

     

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Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

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