Buying a home via Loan has become quite easier these days especially for first time buyers. With the change in the financial landscape these days almost all the banks and financial institutions lend money to buy home which can be easily repaid in easy monthly installments (EMI). But sometimes due to financial crisis, a loan borrower fails to pay the EMI on time due to which they are considered as defaulters. These unavoidable circumstances are known as financial distress or debt distress.
Buying a house is always a dream for any buyer. So when you buy a property on home loan, you must keep many things in mind whether you will be able to repay it or not. Sometimes, repaying home loan becomes a difficult obligation if one fails to pay regular EMI. This may happen as certain circumstances are beyond one’s control, such as loss of job, temporary extra expenditure or prolonged illness which may lead to financial crisis. But banks do not understand these problems as they were told to go through their own policy process.
Even the government of India these days has strengthened the laws governing non-performing assets (NPAs), by giving more power to the financial institutions, to recover the NPAs. And the worst part which is affected if you become a defaulter is your credit score. This will make difficult to avail loans in the future. Even a legal notice is sent to the defaulter if one misses two EMIs continuously.