Help Center
Locate us
Home loan settlement as the last resort
Popular Products
Show More
Quick Help
Show More
Frequently Asked Questions
Show More
Load More
Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
Success
Failure
A home maybe your biggest asset, but it is also true that a home loan is one of the biggest liabilities.
It is more common than we think for people to face financial difficulties and in the process fail to repay their home loan. A home loan settlement can be of great use in such conditions. If you are heading for a settlement, make sure that you take the precautions mentioned below.
Owning a home is one of the biggest joys for a majority of Indians. However, a bigger joy is to close the home loan successfully. A home loan generally lasts for several years, during which time it is likely that a borrower may face financial ups and downs.
In such instances it is often difficult to pay the EMI of your home loan. Rather than avoiding the lender and the recovery agents, it is highly recommended that you should get in touch with the lender and discuss your problem. A home loan settlement is often the solution recommended by the lender. While you should avoid a settlement as much as possible, if it is what you are heading for, make sure that you keep these points in mind.
If you have paid most of the home loan but cannot continue due to a financial problem — rather than hoping that the lender will go away — be proactive. Get in touch with the lender and discuss your problem. Instead of a settlement, which negatively affects your credit score, the lender might offer you additional time or some other solution. The longer you wait, the number of options available are likely to diminish.
While it might look like a good deal initially, a home loan settlement can trouble you in several ways. For instance, when the lender mentions in your credit report that you have paid less than your actual repayment amount, lenders might not grant you any loans in the future. Try to procure the funds from your friends or relatives and go in for the settlement only as the last resort. Also, taking on an additional loan to clear the current loan might seem like a quick but it is not a financially sound idea.
In the case of a loan, ensure that the payments are set at a level which you can easily manage. Don’t get swayed by the idea of a large home when your financial reality is more modest. Avoid any unrealistic settlement plans.
Once you have completed the settlement process and paid the remaining loan amount, check that the credit report reflects this. Lenders often fail to report the settlement to the credit bureau and your report might show that the home loan is yet to be paid.
Keep the above-mentioned precautions in mind when settling a home loan. Remember, we all face financial difficulties but to flee from the lender will only add to your woes.
You have already rated this article
OK