Car Loan EMI Rules: If the owner of the vehicle on which the loan has been taken does not pay the installments, then the bank or finance company can seize that vehicle. But, even if they miss one or two EMIs, they cannot pick up the car. For this they have to follow a fixed procedure and give full opportunity to the loan defaulting customer to repay the money.
If the bank comes to pick up your car without notice, it is completely illegal. (Photo: AI)
New Delhi. Took a car on loan, but if the installment is bounced then the bank will take away the car. This is the fear which troubles the middle class man a lot. Due to sudden job loss, loss in business or illness, many people are not able to pay their car loan EMI on time. People often get nervous in such situations. They think that the recovery agents will pull the vehicle from the middle of the road. But, by law the bank or finance company cannot take away your car if one or two installments are missed.
Reserve Bank of India (RBI) rules say that if you miss just one or two EMIs, the bank cannot touch your car. Only when three consecutive installments are bounced or it has been 90 days since you have paid the installment, the bank can tow your car. For this also they have to follow the legal process. They cannot come directly to your house.
60 day ultimatum
The bank cannot directly seize the vehicle after missing 3 installments. First of all, he has to send you an official demand notice, in which full 60 days are given to repay the outstanding amount. If you are not able to arrange the money even within these 60 days, then the bank will have to issue a pre-possession notice, in which it is said that the vehicle will be taken into its possession. If someone comes to pick up your car without these prescribed legal procedures and notice, then it is considered completely illegal.
Recovery agents cannot commit hooliganism
Often recovery agents start threatening the loan taker. But, doing so is illegal. According to RBI guidelines, no recovery agent can call you or come to your house before 8 am and after 7 pm.
Agents cannot use any kind of abuse, scuffle or mental torture with you. You can ask for the identity card of the agents who have come to your home and the authorization letter from the bank. If any agent tries to forcefully snatch the car keys, you can lodge a complaint with the police.
Can a seized vehicle be recovered?
If you are not able to pay the money even after the notice and the bank takes possession of the car. You can still get your car back. The bank will send you a pre-sale notice before auctioning or selling the vehicle. This is your last chance to save your car, where you can get your car back by paying the outstanding amount.
Discover more from News Link360
Subscribe to get the latest posts sent to your email.
