Have you ever wondered who pays the bank balance in such a situation? Or does the successor have to pay the balance? Or is there a different rule for this? There are different rules for each loan regarding repayment of the loan after death.
Whenever money is needed, the bank takes a loan from the customer bank and repays it in installments. But unfortunately, sometimes the borrower dies and a lot of loan money is left to be paid. Have you ever wondered who pays the bank balance in such a situation? Or does the successor have to pay the balance? Or is there a different rule for this?
If you also want to know the answer to this, then let us tell you how the loan is repaid in this situation and who is responsible for repaying the loan. Know what are the rules related to post death loans and how the outstanding loan can be repaid.
What is the rule? According to a Money 9 report, no to repayment of loans after death, each loan has different rules. This rule is different in home loan whereas for personal loan the procedure is different. This is why you have to consider each type of loan and understand who pays the loan after the death of the loan holder.
What are the rules in home loan? In fact, whenever a home loan is taken, the house papers are pledged in lieu of the loan, i.e. the house is mortgaged. In case of home loan, when the borrower dies, the co-borrower has the responsibility to deposit the loan. He is given this responsibility only if he is able to repay the loan.
Apart from this, they are also given the option to repay the loan by selling the assets. If even this is not possible, the bank auctions the assets held in lieu of the loan. And from this recovers the remaining amount of the loan. Apart from this, some banks have also started using a new option, an insurance is made at the time of taking a loan from the bank that if the person dies, the bank recovers it through insurance. Hence, whenever you take a loan from a bank, you can ask them about this insurance.
What are the rules in personal loan? A personal loan is not a secured loan. In case of personal loan and credit card loan, the bank cannot recover money from another person after death. Also, the successor has no liability for the personal loan. In such a case, the loan also ends with the death of the person.
What are the rules in vehicle loans? A vehicle loan is a type of secured loan. In this case, if the person dies, the bank asks his family to repay the loan. If the family of the deceased also defaults on the loan, then the bank impounds the vehicle, sells it and recovers the money.