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28 OCTOBER, 2021
Mr. Gupta had availed a home loan from a leading bank to purchase his dream home. He had researched extensively and had opted for a loan that he can comfortably repay with his salary. However, Covid- 19 had other plans for the family. With a fatal illness, Mr. Gupta passed soon after availing the loan, leaving a huge home loan amount behind. Now his wife, who was already grieving the loss of her husband, is clueless about the home loan.
The demise of the borrower of a home loan can be a hard blow to the family. However, knowing the further processing of the loan can help them manage the debt. Read on to know what happens when the borrower of a home loan passes away.
Who Will Pay the Loan?
Home Loan Insurance
It gets easier for the borrower’s family to manage the loan if the borrower has taken home loan insurance. In the event of the borrower's death, the insurance company repays the loan amount on behalf of the deceased.
A home loan insurance policy can be bought with the home loan to cover the loan amount. Having home loan insurance helps the family members to repay the loan. Reserve Bank of India suggests all home loan borrowers buy a home loan insurance policy while availing a home loan.
The borrower's death can be a difficult time for the family members, both emotionally and financially. Experts suggest that the borrower should ensure that the family knows about the loan and can handle the loan process if needed. The borrower should buy a home loan insurance policy. In addition, he should intimate the lender about the person responsible for repaying the loan in his absence.
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