What can a Borrower do if the Bank is in Crisis? Homeonline

Dev Singhraha

Relocation Expert

With the ongoing crisis of the Non-Banking Finance Companies (NBFCs), the loan borrowers are worried about their investment and how they should approach their debt if the bank goes in the crisis. Many are concerned that even the big banks would see the same fate given the amount of financial fraud the banks and financial companies have been dealing with.

We discuss everything that one must do if their bank or the financial company goes into crisis mode:

Do no stop paying EMI: Even though your bank or financial company have gone bankrupt, do not stop paying your EMIs. Skipping even a single payment will reflect in your credit history and will hurt it more, making it difficult for you to get a loan in future. Stopping your monthly EMI will also hurt your relationship with your builder. The borrower shall not discredit the banks’ chance of revival with the help of the government. It should be noted that if all the borrowers stop paying the EMIs, the problem with the bank may worsen. Also, the builder- buyer agreement continues even if the bank goes into crisis; hence it is not worthy to stop paying your EMIs.

Switching home loans: If you doubt that your bank will not revive the financial crisis, changing your loan lender is a good option in this case. When looking for a new lender, make sure the new lender is in good financial health even if the home loan interest rate is not the one you used to pay. The new lender will look into your payment history to know more about how you financially reacted when your bank went on crisis mode. Hence, it is wise not to stop paying your EMIs.

Wait and watch: Before taking any step, it is worth waiting and watching from the sidelines. When a bank or the financial company goes into crisis mode, they try to strike a negotiation with the government or ask for financial help. It is the best approach to wait and follow how your bank is approaching the current financial crisis. If any new company takes over the bank, then the current agreement will continue, and the borrower will not have to sign a new agreement.

When it comes to approaching the matter in case of the financial crisis, it is often advised that the borrower takes an informed step.

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