personal loans and credit cards, which are largely unsecured, rose the sharpest. But what’s more alarming is that delinquency in this category has risen for personal loans compared to pre-COVID levels. Now the burning question of the hour -What do you do next if you are a defaulter? This can be a very stressful experience for many people who don’t know how to handle harassment from loan recovery agents.
Being a defaulter can negatively impact credit health, leading to lower credit scores and higher interest rates. Banks should handle default cases with empathy and offer personalized solutions. Defaulter's legal rights include receiving notice, fair debt collection practices, grievance redressal, seeking legal assistance, and fair credit reporting.
Livemint spoke to experts regarding a rise in the number of defaults in the retail loan category Manavjeet Singh, MD & CEO, CLXNS) The RBI guidelines have definitely brought some relief to defaulters. They allow defaulters to restructure their loans and make smaller payments, which can help them get back on their feet financially. The guidelines also provide for a longer repayment period, which can make it easier for defaulters to manage their debt.
For example, let's say you have a loan of 10 lakhs that you are unable to repay. Under the RBI guidelines, you could restructure the loan so that you only have to pay 5 lakhs now, and the remaining 5 lakhs would be repaid over a longer period of time. This could make it much easier for you to manage your debt and get back on track financially.
Being a defaulter can have a significant impact on your credit health. Your credit score will likely decrease, which can make it more difficult to get approved for loans in the future. You may
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