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Not able to pay EMI for home loan what can I do


08-Jul-2023 (In Recovery Law)
My father passed away a month back and has not left a will. My younger brother and my dad were co-applicants on a home loan (HDFC Home loans). The EMI is higher than what my brother earns monthly. We went to HDFC home loans to discuss the issue and they did not help and advised to sell the flat. According to them loan is not covered by any home insurance or term insurance. Some of relatives were suggesting that as per law, banks has to forgive the loan or reduce the outstanding principal by 40% . Please advice. Loan amount: 18 lacs Outstanding as of now: 15.17 lacs
Answers (1)

Answer #1
757 votes
There is no law in India that says banks have to forgive loan or reduce the outstanding principle by 40% if one of the co-applicants of a loan debt dies. The bank has lent the money and it is a legal debt that has to be repaid. Since your younger brother is a co-applicant but earning less amount than what he can pay as EMI, he may approach the bank for reconstruction of loan. In this event, you may request the bank to increase the period of repayment of loan so that EMI is less. But remember, you would be paying more interest. However, reconstruction is subject to approval of HDFC bank and your way of approach.
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Raghavendra Rao B.K.

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