There are many big disadvantages of taking a loan and not repaying it.
The need for money is never obvious. Any person may need money at any time. If there is a sudden need for money and you do not have it, nor are you able to arrange money from any friend or relative, then you have to take a loan from the bank. Generally banks give home loan for buying a house and auto loan for buying a car. Banks provide personal loans for other needs. Personal loan is costlier than home loan and auto loan. But if a person takes a personal loan from a bank and does not repay it, then what can the bank do? Here we will know what steps the bank can take for the recovery of personal loan.
Bank can take legal action
According to AU Small Finance Bank, if a person takes a personal loan from a bank and does not repay it, then the bank can initiate legal action against that person. Under this legal action, the bank can file a civil suit against you, in such cases the court can order the defaulter to repay the loan. In many cases, the court can also order confiscation and sale of the property of such people to recover the loan.
Facing harassment from loan recovery agents
According to AU Small Finance Bank, when the loan giving bank is unable to recover the loan amount from a person, then they can appoint debt collection agencies for recovery. People from debt collection agencies may harass a person who does not pay the debt, which can cause a lot of stress and anxiety.
CIBIL score will deteriorate badly
Apart from all this, if you take a loan from any bank and do not repay it, it directly impacts your CIBIL or credit score. Forget about repaying the loan, if you delay in paying the loan installment then your CIBIL can get spoiled. Due to which no bank will give you loan quickly in future. Even if a bank is ready to give you a loan against a bad CIBIL, it will give you the loan only at very high interest rates.
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