Personal Loan Rule: If you are unable to repay your personal loan then do this, you will get relief..

Do not panic if you are unable to pay EMI in a financial crisis. By adopting some methods, you can get out of the debt trap. It is important to remember that taking another loan to repay one loan can trap you in a vicious cycle of debt, so this should be avoided. Let us know what steps should be taken when you are not able to repay the loan. (Bank News)

Demand time from the bank-

If you are unable to repay the loan, immediately contact your bank or NBFC. Tell them your situation and request some relief in the EMI payment. Tell them clearly how long you are unable to repay the EMI. The bank will assess your situation and decide whether to give you additional time or not. They may agree to your requested period (eg, 1 year) or give less time.

Get the loan restructured-

If you do not have the money to pay the EMI, you can request the bank to restructure the loan. This will reduce your EMI amount, but the loan repayment period will increase.

For example, if you took a loan of Rs 5 lakh for 5 years and paid EMIs regularly for 3 years, in case of financial difficulty, the bank may extend the period to repay the remaining amount, thereby reducing your EMI.

Go for a Balance Transfer (BT)-
Many banks offer a Balance Transfer facility, where you get a new, possibly larger loan. This new loan can be used to repay your old loan and get additional funds, which can help improve your financial situation. Some banks also offer loans at a lower interest rate than the old bank, so selecting such a bank for BT can be beneficial. Both loans and credit card loans can be balanced transferred. 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 repeatedly contacting 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 outstanding amount of your loan, but usually accepts a lump sum amount between 10 to 50 percent and waives the remaining amount.

Most banks give about one week to repay the settlement amount. By understanding these measures and taking appropriate steps according to your situation, you can manage your loan even in times of financial crisis.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.