ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In such cases, the lender has to first issue a 60-day notice to the defaulter. If the borrower fails to repay within the notice period, the bank can go ahead with sale of assets. However, in order to sell, the bank has to serve another 30-day public notice mentioning details of the sale.

Detailed explanation-2: -Collateral gets affected While this is the last resort, banks can rightfully take possession of the collateral and auction it to recover the loan amount if you fail to repay the loan.

Detailed explanation-3: -A default on debt happens when a borrower fails to repay the funds according to the initial agreement. With most consumer loans, this typically involves missing multiple payments for several weeks or months in a row.

Detailed explanation-4: -In a different scenario, if a co-applicant or co-signer is involved with a personal loan, that individual is liable to pay the outstanding amount after the death of the primary personal loan borrower. However, there is no such rule that mandates a legal heir of a deceased borrower to repay the due amount.