What will happen if something happens to me after I have taken the personal loan

Posted by KushiBL on March 25th, 2020

What will happen if something happens to me after I have taken the personal loan?

In the case of a secure personal loan, the collateral attached to the loan is redeemed to reclaim the loaned portion of the loan along with the interest. Borrow your personal loan from         Buddy Loan explore the benefits of lowers interest rates, increasing your CIBIL score and loan repayment options from this loan aggregators.

In the case of an unsecured personal loan, problems could be posed for the co-signer of the loan. Co-signers are generally not aware of the implications of their actions. But with their consent, they automatically become part of the lending bond or agreement.

 The co-signer will be asked by the bank to pay the remaining amount. However, the rules of such a repayment are vested with the bank. The repayment schedule could be continued as the original one, or a new repayment schedule with a relaxed interest rate may be applied.

However, there are still cases when unsecured personal loans are disbursed without co-signers. Generally, all financial obligations end for the deceased borrower upon their death. But the lender can still transfer the financial debt to their properties or estates. In such cases, the estate of the deceased may be sold to recover their debts.

The survivors, family members or dependents of the deceased can prevent the estate from being mortgaged by volunteering or committing to pay the borrowed money.

Rules for picking personal loans

• Choose the lender and not the other way round

o   Customers have a variety of choices; banks are constantly courting them with SMSs, tele-callers, email marketing and more.

o   It’s important to shop for personal loans with care. Read the terms and conditions. Check for hidden charges.

• Beware of flat rates

There are two types of flat rate personal loans.

o   One personal-loan type charges interest on the original principal amount.

o   The other personal loan-type charges interest on the reducing principal amount.

o   Always choose the latter. In the former type of personal loan, you end up paying more interest.

• 0% percent EMI schemes

o   Check the processing fee of such schemes. If they are high, then the lender makes up for the percentage of interest by levying a high processing fee and other charges.

o   These personal loan types are highly sought-after for purchasing consumer durables and electronic items. Processing fee, miscellaneous charges are generally higher. It is advisable to steer clear of such schemes.

Conclusion

A personal loan is a boon if chosen with care and precision. Avail the amount that is needed and nothing extra. Plan the repayment, and enjoy the benefits of a personal loan.