Are you planning to take a home loan? Are you a home loan borrower? Then you need to know a few things. If the loan is taken and the EMI is not paid, the interest will increase and if it is not paid continuously, the bank will take further action.

In some cases, there is no problem in defaulting on EMI payments. But if the home loan EMI is not paid for three consecutive months, the bank will take further action.

The bank will send a notice to those who have not paid for three months, considering them as "defaulters." In this case, the borrower should immediately approach the bank and explain their problems. If the bank is interested in having a good credit history and explaining the real reason, the bank is likely to allow some grace period for them. However, if they don't pay, their CIBIL score will go down.

In case of a default, the bank will send a 60-day notice under the SARFESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act). The Act empowers banks to auction properties to recover money owed to borrowers. During these 60 days, the loan owner will have the opportunity to repay their dues. The bank then sells the property. The borrower will also be entitled to the additional amount received through the auction.

In the difficult situation of having to default, it is better for the loan owner to sell their home as soon as possible and return the money to the bank.