Legal Question in Banking Law in India

Hi sir,

I am an Indian citizen.I applied for an education loan to a nationalized bank for 1,40,000 in 2004 for my engineering. They sanctioned the loan for a year of 2004 to 2008 educational period. Every year starting from 2004 , they sanctioned 25,000 rupees as annual fee up to 4 years(i.e. up to my final year 2008) and extra 40,000 rupees as fund for computer & travelling charges. I didn't got any job from 2008 to now also. So, i couldn't pay my EMI's yet. I will pay my loan , once i get job. I want to know, will the bank provide me the required time? Or it will take any action against me? What do the banks do when any customer is unable to pay education loan? My mom and dad were my guarantees for this loan. Even they don't have any income. I don't want to be a burden for them. I will pay the loan once i get job. But, in advance i want to know everything about any legal action/ proceedings will be taken by the bank if any? Thank you, sir, in advance.


Asked on 6/24/11, 6:31 am

2 Answers from Attorneys
J. Radhakrishnan independent Practice

Please send a request to the Bank explaining your difficulties and requesting for rescheduling the repayment schedule and granting a moratorium for some years. Normally banks do reschedule such loans on assessment of the good faith of the borrowers. If there is default the Bank will take legal proceedings against the borrower and guarantor for recovery of the loan.

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Answered on 6/25/11, 8:57 pm
Pravin Vaidya Independent

Please explain to the bank, the circumstances under which you are not in a position to repay the loan and seek some more time. Submit your time-bound plan to repay the dues and if possible offer some immoveable property as collateral security.

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Answered on 6/28/11, 8:06 am


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