What does the bank do if the loan taker dies?
Taking a loan when you suddenly need money is not a big deal in today's time. people usually take instant personal loans to buy a house or to meet any other financial need. The bank gives you a loan and charges you interest, whose installment has to be paid every month. Your credit score is very important for the loan, on the basis of which the bank gives you a loan or there is also a need to keep something as a guarantee. But have you ever wondered that if the person taking the loan suddenly dies, then from whom or how does the bank recover the money? Who pays the bank's loan on his behalf? Today we are going to give you information about this in this news.
The bank talks to this person first
Talking to Moneycontrol on this, Tata capital said, if the person taking the loan dies, then in this situation the bank first contacts the co-applicant. If the co-applicant pays the money, then it is fine, otherwise the bank talks to the guarantor or asks a family member of the deceased or his legal heir to repay the loan amount. Now if any of them is unable to repay the money, then in this situation the bank seizes the property of the deceased and then recovers the loan amount by selling it.
The bank recovers the money by auctioning the property
The same rule applies to a person taking a home or car loan. If a person who takes a loan to buy a home loan or a car dies, the bank seizes his house or his car. To recover its loan, the bank seizes the property of the deceased and auctions it. Due to this, the family of the deceased has to face a lot of problems. To ensure that the family members do not have to face any such situation in their absence, it is necessary to take term insurance so that the loan amount can be reimbursed from the insurance in times of trouble.
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