Things credit card companies do not want you to know

Things credit card companies do not want you to know

Things credit card companies do not want you to know

Credit Card Companies

You and your credit card are inseparable. Right from paying for your groceries, to your child’s school fees or for your movie tickets or flight bookings, credit cards are no longer a status symbol but a necessity. As a result we have enslaved ourselves with the credit card. But there are things credit card companies don’t want you to know. But the fact is you are the boss of the credit card issuer and not the other way around. And to top it all, if you have a good credit score, you are in control of your credit destiny. Credit card features like APR, credit card payment, and credit card offers should be clear before you opt for the best credit card.


When applying for a credit card you can actually negotiate for a lower APR or annual percentage rate. One can also adjust our due date depending upon your cash flow. Though it is in the hands of the credit card company to give you a lower APR, but you can always ask for one as these days the market is very competitive and the customer is the boss.


This is actually fine print which we often tend to miss. Issuers can raise your APR whenever they choose. You should be notified about the increase in interest rate but ensure that you receive your mails on time and remember to check them regularly.


Don’t forget that your credit card company monitors your credit report regularly and if you are late on any bill or faltered on any payment, your APR will be increased.


You are sometimes lured by credit card companies that you can take cash advances but what they might not reveal that APR for a cash advance is usually very high. Cash advances often lead to debt and then the issuer makes interest off your balance for a very long time.


The thumb rule is paying off your balance on time and f possible early. Pay off your due on the same day or at the end of every month whichever is convenient, so that you can keep a track of your transactions and balance in our savings account.


The minimum payment is to the benefit of the company and not yours. This is the worst secret never disclosed to you. The longer you stay in debt, the more interest credit card companies can charge, and the more money they make. The companies make the maximum profit out of these low payments.


You are at times lured to a particular credit card company because of the attractive credit card offers. But these programs may change anytime and the fine is often confusing to analyse. Moreover, these reward programs might not benefit you in the long run.

You must also know the types of credit card frauds and credit card tips for smart users in order to use credit card to best of your advantage,

Consumer VOICE experts compared credit cards on basis of credit card interest rates, best credit card deals and other parameters to list the best credit card. 

Types of Credit Card Frauds

Types of Credit Card Frauds

Types of Credit Card Frauds

credit card frauds

If you are a credit card owner there is a chance that you may be subject to credit card frauds like thousands of others around the world. Use of credit cards around the world has increased over the years. Online payments and electronic transfers have led to the increased use of credit cards over the years and with it, credit card frauds have also doubled. Though banks and payment industries have created new technologies like secured payment gateways and innovations to combat fraudsters, yet consumers are not informed of credit card frauds and how to protect themselves against it.

There are two main types of Frauds

Card- Not- Present (CNP) Frauds

The most common type of fraud is the Card Not Present fraud or CNP fraud. This occurs when the customer does not present the card physically to the customer or to any credit card machine but the card holder’s information is still stolen and used illegally. Card-not- present fraud can occur when a fraudster gets hold of a cardholder’s name, billing address, account number, three-digit security code and card expiration date which can be stolen electronically, without obtaining the physical card. Card not present fraud occurs online or over the phone. It may also be a result of phising emails sent by fraudsters to steal personal or financial information through an infected link.

Card-Present Frauds

This type of fraud takes place when the credit card is physically presented to the merchant during the transaction and takes the form of skimming. Once that data is used on credit card machines to make a purchase, the consumer’s account is charged. These frauds have relatively come down over the years and it is easier to detect because the merchant can match the signature and observe the behavior of the customer as well. Some of the signs that one can look for to identify possible card-present fraud are when a consumer purchases many items without caring about their price or style, when a consumer hurriedly rushes to complete the
transaction or making bulk purchases.

Apart from being cautious about credit card frauds, you must also know credit card tips for smart users so as to make it a more effective financial tool rather than a liability.

Some Other Ways of Credit Card Frauds
  • Card Cloning : A common way of credit card fraud is card cloning with the use of
  • Card Skimmer. This is a device that is used by criminals to record all the data on the card so that money can be siphoned off easily from the account. Fraudsters fit skimmers in ATM machines which scan all the data of the card and makes clones.
  • Card Trapping: This happens when the card that you insert in the machine gets trapped and you retrieve it only later. Your card can be misused in the mean time.

Consumer VOICE experts compared credit cards on basis of credit card interest rates, best credit card deals and other parameters to list the best credit card


Ways to secure a Covid-19 personal loan

Ways to secure a Covid-19 personal loan

Ways to secure a Covid-19 personal loan

Covid Loan

The need of taking a personal loan has increased immensely facing many unexpected situations including job loss, pay cut or any medical emergency/treatment. Small businesses too have faced closures or less revenue generation due to the ongoing situation. Personal loans thus have emerged accessible to encounter any such instances. In the following article, we’ve talked about the steps of availing a personal loan including choosing a bank, interest rates to consider, documents to prepare along with many such relevant information.

Subas Tiwari

There are several banks and financial institutions providing attractive deals on personal loan offers with lucrative interest rates. Each personal loan lending institution has different eligibility criteria, rate of interest, and repayment tenure, which should be reviewed and compared to make an informed and smart decision before applying.

Government banks (PSU Banks) have launched a very good initiative by offering personal loans for Covid-19 treatment. They have started a special project of unsecured personal loan. Under which, a personal loan of up to Rs 5 lakh can be taken to mitigate any such mentioned expenses or emergency cases. The interest rate for this category of personal loans is low. Generally, interest rates for an unsecured personal loan range between 11 to 17 per cent. Here, the interest rate is cheaper. The country’s largest bank SBI is offering this personal loan at 8.5 per cent. However, presently there is no uniform interest rates for Covid personal loans as different PSU banks ask different rates. Along with the lot, Union Bank of India and Canara Bank have also announced Covid personal loan, lately.

A person can take this personal loan for himself or for any family member from government banks. The loan can be availed for a period of up to 5 years which implies that the banks will have to repay the loan amount within 5 years. In recent times, we have seen a lot of people taking personal loans at a very high rate to meet Covid treatment. Here, the Covid personal loans come handy.

How to apply?

You need to visit a government bank branch and apply for this loan. Presently, this can’t be done online. Once you’re sure of availing this loan, know that there are two ways to go for the same. The first is- after hospitalisation. Once you’re hospitalised, you will need to visit the bank branch with the hospital bill and the bank will decide the loan amount based on your repayment capacity. Second is, the hospital gives an estimated amount of the treatment cost to the concerned person, which will have to be taken to the bank and apply for the loan. In this type, banks can give loans ranging between Rs 25, 000 to Rs 5 lakh. However, it is up to the bank authority to approve or reject your loan application.

Eligibility of personal loan

For salaried class
  • Should be having an active bank account where salary is being credited regularly. The bank account need not be with the bank where one is applying for a personal loan, but banks prefer to consider such loans to be given to their own clientele on priority.
  • One should have a job of permanent nature. Banks would not give a loan to a person whose job is temporary or who has no means of regular income even though he may be owning movable assets.
  • The length of service or employment also plays a part in expediting the loan sanction.
  • Place of residence should either be owned or rented with a lease agreement.
  • Residence proof (Voter ID card, Aadhaar Card, etc) and identity proof (employment ID card, PAN card, etc) copies should be produced duly self-attested along with bank application form and 2 photographs.
  • Though the reason/purpose of the personal loan is not mandatory, the bank would like you to state some reason.
  • If you already enjoy any other loan like car loan or home loan, those deductions will also be taken into account to calculate total deductions out of the salary and arrive at eligible loan amount.
  • Your CIBIL score (see box) will also play a significant part in bank’s decision in granting a personal loan.

There is no fixed criterion for arriving at eligible loan amount, as individual banks have different methods of calculation but the generally accepted practice is to fix a ceiling of about 50 per cent of deductions from salary including the repayment of the loan to be granted. If you are within this ceiling, then the eligible amount could be about 10/12 times the gross monthly salary or 6 times the total taxable income as declared in Form 16 or the Income Tax Return. This can vary amongst nationalized banks and can be different among private banks (private banks commute on the take-home pay).

For self employed

Certain additional conditions may apply for geek employees, individuals who run their own business or freelancing assignments in availing a personal loan from a bank. Since he does not get salary, the business income as reflected in the Income Tax Return would be the basis of ascertaining his total income. S/he may be required to submit details of his enterprise.

The performance of the business can also be a factor to influence his loan sanction. In case of new enterprise, banks can insist on collateral securities like bank deposits, bonds, etc in addition to providing one or more personal surety of adequate net worth.

For professionals

They are those who either have their own business/service like doctor, lawyer, etc or those who are technically qualified but are working in an organisation.

The following could be additional conditions to be fulfilled.

  • The attested copy of their Qualification would be required to be submitted alongwith the application form.
  • Since some of the banks have specialised personal loan scheme for such professionals offering lower rate of interest on such loan, the lending may ask some details of the profession as also copies of receipts/payments and/or income/expenditure account.

Advantages/ benefits of a personal loan to a consumer-borrower

  • The first and foremost benefit is the quickness with which the loan application is either sanctioned or disposed off (rejected). The icing in the cake is in the timing.
  • Secondly, in most of the sanctioned personal loans, the banks do not insist on any collateral security or in some cases, even personal guarantee/surety unless you have less than the minimum prescribed years of service or your take-home pay is lesser. So, it is advantageous for the loan-seeker, as he need not be under any obligation to his office colleague/friend into requesting for providing a personal surety.
  • Most of the banks do not ask for margin component (borrower’s stake in the risk). Hence, there is absolutely no need for the consumer to run around to arrange to provide for depositing margin money.
  • The purpose of the loan is immaterial in most cases. Hence, the consumer need not take pains to explain the genuineness of the purpose and submit proof for such purpose.
  • Simple documentation is assured with no elaborate procedures.
  • Making monthly repayments is now made consumer-friendly with banks agreeing to take post-dated cheques (PDCs) for the amount of each instalment and presenting the same on due dates of loan. The consumer need not visit the bank at all for such work. Where the loan instalment payable is to be taken out of the savings account of the customer, the banks obtain written instructions (ECS) and act on them.

Disadvantages/limitations to the consumer-borrower

  • The rate of interest is the highest for this type of loan. Due to its unsecured nature of the loan, interest rate is on the higher side. Whereas secured loans are comparatively cheaper.
  • Secondly, the period of the loan is normally limited to 60 months. Banks do not favour or take exposure for a longer tenure. This limits the consumers’ requirements, where, by getting a longer period of repayment, he could bring his work to completion.
  • According to bank sources, this type of loan is having higher risk and can end up as a Non-Performing Asset, if repayment stops midway either due to change of job/temporarily-unemployed status/death of the borrower/change of address without trace, etc. Hence, many banks do not consider giving a loan for non-customers, i.e., those who have no previous bank dealings with the lender. So, this severely restricts the options available to the consumer-borrower to seek a loan from any bank in the vicinity of his residence or place of work.
  • Most of the banks are not willing to grant personal loans of more than Rs 15.00 lakhs even though their website/brochure talks of maximum amount being much more than what they say they will give. So, the consumer/borrower will not get the benefit of more loan even if he is otherwise eligible!
  • Even though a couple of banks claim that they don’t need personal surety/guarantor for such loans, many of the banks insist on providing the same for the loan transaction to add trustworthiness to the loan contract.

Do not make these mistakes while taking a personal loan

One should be very careful in taking a personal loan as its interest rates start from as low as 11 per cent, which is very high. Higher interest rate can weaken your financial position. Let us know how to take a personal loan. What is its process and what precautions should be taken while taking personal loan?

  • Be careful in choosing lenders-banks and NBFCs market personal loans very aggressively. Everyone claims at least the interest rate. But do your research. One can check this by visiting some bank branches or on loan aggregator websites to find out who is offering the lowest interest rate personal loan.
  • Avoid flat rate. Banks claim to give loans at flat rates. But don’t fall for the flat rate. This is a strategy to mislead the customer. The flat rate does not tell you how expensive your loan is.
  • Personal loans can be for a tenor of one to five years. Usually, while giving a bank or NBFC loan, it is seen that your EMI does not exceed 40 to 50 percent of your monthly salary. Let us now see what precautions should be taken while taking a personal loan.
  • Avoid Zero Percent EMI. Banks offer loans with the lure of zero percent EMI. But in the name of processing fees and file charges, they charge a substantial amount. If you take a loan of 50 thousand for a period of six months and pay a processing fee of Rs 2 thousand on it, then your interest rate falls to 14 percent, not 12.
  • Find out other charges. There is a fee for processing a personal loan. It is one to two percent. You will think it is not much. But many banks also charge foreclosure charges. That is, if you get the money and you repay the loan ahead of time, then foreclosure fee is levied. Find out about it.
  • Take care of credit history. While sanctioning a personal loan, banks also look at your credit history. Many times, if you go to more banks or NBFCs, then you are considered more needy. This has a negative effect on your credit history. It is better that you find out the interest rate through the loan aggregator website or portal before visiting several banks or NBFCs to find out the personal loan interest.
  • First of all, decide what your real need is. Accordingly, decide to take a loan.
  • Find out how much loan you can get. For this, you can visit any bank branch or you can find out from the bank’s online loan eligibility calculator. Banks like HDFC Bank offer personal loans up to Rs 40 lakh.
  • Find out the EMI of the loan you want. This can also be ascertained from the existing EMI calculator on the bank site. Or you can get it calculated from the bank branch.
  • You can apply for personal loan directly by visiting the bank branch. You can apply for a personal loan through net banking, online app or ATM.
  • After this, the documents have to be submitted. In these, salary slip as income proof or income tax proof for self-employed people is required. Address proof, identity proof document or self-employed people also have to provide proof of degree or license.


The RBI has come down heavily on commercial banks for causing inordinate delays in conveying their credit decisions/credit disbursal. In its latest notification to all the banks, they have been asked to carry out due diligence before arriving at credit decisions to ensure timely and adequate availability of credit. RBI has further said that banks must put in place loan disbursal timelines within 30 days of the RBI circular. Banks are also expected to make suitable disclosures on the timelines for conveying credit decisions through their websites, notice boards, product literature etc.

Leading bankers have opined that this move could push banks to cut procedural delays. They said that already individual banks have their own internal guidelines and timelines for disposal of small loans. But a centralized system as suggested by RBI would help and speed up matters.

Under the RBI Guidelines on ‘FAIR PRACTICES CODE’ for lenders, it has been stipulated that time-frame for disposal of loan applications up to Rs.2,00,000 should be indicated at the time of accepting the loan applications.


Decoding the new gold hallmarking rules

Decoding the new gold hallmarking rules

Decoding the new gold hallmarking rules

Gold Hallmark

Gold hallmarking is the accurate determination and official recording of the proportionate content of precious gold metal articles. Hallmarking is done of six caratages of gold jewellery/ artefacts, viz. 14, 18, 20, 22, 23 and 24 carats. While, the mandatory hallmarking is surely a welcome move for the consumers, let us take a quick look at the set regulations.

Ashok Kanchan

Bureau of Indian Standards (BIS), the national standards body of India through its network of regional/branch offices all over the country operates the hallmarking scheme for gold and silver jewellery. Regular surveillance audit of assaying and hallmarking centres and testing of random market samples drawn from registered jewellers.

Hallmarking provides third party assurance and satisfaction that customer gets right purity of gold (or silver) for the given price (value for money).

 Hallmarked gold jewellery  has five marks: BIS mark, purity in carat, assay centre’s name, jewellers’ identification mark and year of hallmarking.

Points to take note while purchasing gold jewellery

  1. a) Check the BIS certificate of registration displayed in the shop. 
  2. b) Check hallmark, consisting of five marks, on the article with the help of a magnifying glass of 10 X magnification available in the shop.
  3. c) Do not forget to take the bill/cash memo which should mention hallmarking cost, net weight of gold, purity in carat and fineness on the bill/cash memo. 

The new gold hallmarking rules


The central government has made it mandatory for the jewellers to sell only hallmarked jewellery. The mandatory hallmarking of gold jewellery is coming into force from 16th June, 2021.

A few points of latest government order

  • The hallmarking scheme has started with 256 districts of the country, which have assaying and hallmarking centres. 
  • At present, 943 assaying and hallmarking centres are operational in the country.
  •  Jewellers with annual turnover of up to Rs 40 lakh will be exempted from mandatory hallmarking. Watches, fountain pens and special types of jewellery like kundan, polki and jadau will also be exempted.
  • Export and re-import of jewellery as per the Trade Policy of Government of India – Jewellery for international exhibitions, jewellery for government-approved business to business domestic exhibitions will not be hallmarked.
  • According to the government order, any manufacturer, importer, wholesaler, distributor or retailer engaged in selling precious metal articles has to mandatorily get registered with the BIS. The registration process will be one-time and there will be no fees charged from jewellers for it.
  • Artisans or manufacturers who are manufacturing the gold jewellery on job work basis for the jewellers and are not directly related to sale to anyone in the chain are exempted for registration, the government said.
  • Gold of additional carats i.e. 20, 23 and 24 will also be allowed for hallmarking.
  • The ministry in its release clarified that old un-hallmarked jewellery available in households can be sold to jewellers. It said that that, jewellers can continue to buy back old gold jewellery without hallmark from consumer and in order to give adequate time to the manufacturers, wholesalers and retailers of gold jewellery, there would be no penalties till August end.
  • BIS (Hallmarking) regulations were implemented with effect from June 14, 2018. According to BIS, hallmarking will enable jewellery buyers to make the right choice and save them from any unnecessary confusion while buying gold.

Is the order applicable to gold bullion and coins also?

No, the order is applicable for gold jewellery and artefacts only. Gold bullion/coins of 999/995 fineness are permitted to be hallmarked by BIS approved Refinery/Mints (39 licensed refineries are in operation at present as on 01 Jan 2021). The list of BIS licensed Refineries/Mints is available at BIS website under the hallmarking tab.

Information on hallmarking

All the information regarding hallmarking in detail has been provided at BIS website, under hallmarking section. The information includes procedure and guidelines for jewellers and hallmarking centre, all the forms and list of registered jewellers and hallmarking centres etc. 



ATM Facilities, Payment Utility services in ATM

ATM Facilities, Payment Utility services in ATM

What else you can get from an ATM?


Withdrawal of money, balance check or mini statements form a small part of a lot of ATM services. Read on what are the other services you can avail from an ATM.

                                                                                                                                                             Subhas Tiwari

Banks including SBI, ICICI, HDFC and Yes Bank offer you different facilities from their ATMs. Let’s look at some of the ATM services other than cash withdrawal and balance check.

FD and checkbook request

You can request for fixed deposit at an ICICI Bank ATM. Under which, request for FDs ranging from Rs 10, 000 to Rs 50, 000 can be put through. You must have a resident savings or salary account with ICICI Bank. It is also necessary to have a debit card and PIN. SBI and ICICI Bank ATMs also have the facility of requesting for checkbook. The check book will be delivered to the register address in your bank.

Mobile recharge and pin change

Debit/ATM card PIN can be changed by going to the ATM. Also, you can recharge your prepaid mobile connection from an ATM if you are facing internet connectivity issues. There are many other banks including SBI, which are providing this facility from their ATMs.

Card to card transfer

You can also transfer funds to a customer of your own bank or a customer of another bank. A card-to-card transfer of up to Rs. 40,000 per day can be done from one SBI debit card to another at an SBI ATM. Union Bank of India, Bank of India, Canara Bank, Yes Bank etc. also provide funds transfer facility to their customers using debit cards of other banks as well.

Payment of utility bills and credit card bills

Utility bills such as electricity, water, and mobile postpaid bill can also be paid from an ATM. This facility is available in ATMs of SBI, HDFC Bank etc. Besides, credit card bills can also be done from ATM. One will just need to keep the credit card number handy.

Tax payment and donation

Tax can also be paid from ATM. Union Bank of India and HDFC Bank ATMs have this facility. For this, one has to register the debit card for payment of tax from the ATM on his bank’s website. ATM will provide you a slip with SIN number on payment of tax. You have to submit this number on the bank’s website within 24 hours. On the other hand, if you want to donate to a temple or charity, then this work is also done from ATM. For example, SBI ATM will give you Vaishno Devi, Shirdi Saibaba, Gurudwara Takht Saheb (Nanded), Tirupati, Sri Jagannath (Puri), Palani (Tamil Nadu), Ramakrishna Mission (Kolkata), Kashi Vishwanath (Banaras), Tulja Bhavani and Mahalakshmi Mandir (Mumbai) like many other temples and trusts.

Deposit and mobile banking registration

This facility is available at Axis Bank ATMs. You can withdraw cash from here as well as make a cash deposit. For this, you have to put money in the ATM machine or deposit it by cheque. Through ATM, customers can also register for mobile registration. SBI, ICICI Bank ATMs etc. are providing such facility to their customers.

Insurance premium paid and loan applied

Many banks have the facility of paying the insurance premium by going to the services option in ATMs. Apart from this, you can also apply for loan from ATM. ICICI Bank and HDFC Bank ATMs have this facility. ICICI Bank is providing an instant personal loan of up to Rs. 15 lakh to the customer through an ATM.




Five steps to know if you miss paying your home loan EMI during this pandemic

Five steps to know if you miss paying your home loan EMI during this pandemic

Five steps to know if you miss paying your home loan EMI during this pandemic

Home Loan EMI

The pandemic has hit the salaried employees gravely and a lot have lost jobs as well. In facing such tough situations, what if you miss paying the EMI of your home loan. Here is a guide that gives a heads up.

Subas Tiwari

Generally, the majority part of one’s salary goes to pay the home loan EMI and when that person has to suffer a job loss or salary cut, the EMI goes for a toss. And, the interest amount is added to your overall balance every month. Consequently, this increases the tenure of the loan as well as many more difficulties may come. If you face such difficulties, first of all, contact your bank and tell them about your situation frankly. The bank will certainly offer you an extension if your credit history is good and you have paid EMI regularly. The bank also has the right to extend the duration of your home loan, which will reduce the EMI.

Three to tango

The bank does not take immediate action if you miss one or two EMIs. Firstly, it will issue a notice if you miss three EMIs in a row. However, the bank will give you a grace period of two months for the last time to resume EMI if the borrower does not pay EMI for six consecutive months. Even after all these efforts, if EMI is not deposited, then the bank declares such loan as non-performing asset i.e. NPA. Now, the bank can seize your property and proceed with the auction process.

What is SARFAESI Act of 2002?

SARFAESI or the Securitization and Reconstruction, of Financial Assets and Enforcement of Security Interest Act of 2002 helps financial institutions, including nationalised and private banks, in securing the quality of their assets in a different way. Banks also use this Act for debt collection, on which a writ was also filed by the common people in the High Court and Supreme Court of many states.

This Act empowers banks to auction property of borrowers. Through this Act, the bank reduces the burden of its NPA. For this, the bank does not need approval from any court. But the bank first tries to ensure that the EMI starts again in some way. When all the options are closed, the bank moves further with the property auction process.

The borrowers have a chance to acquire their property until the day the bank announces the auction date. The borrowers can stop the process of this auction by making a payment to the bank. Apart from this, due to the announcement of the auction process by the bank, some charges will also have to be paid separately.

The SARFAESI Act is commonly used to recover the debt. As NPAs of banks continue to grow and loans were not recovered even after strict action against defaulters, the Act gives banks a form of force through which they can acquire their assets. Let us know some more about this SARFAESI ACT 2002.

Rights of banks under SARFAESI Act

The bank has the facility of money transactions, loans are also sanctioned by almost all banks. Money is issued from home loans to personal loans. According to the RBI guidelines, it is the responsibility of the banks to help common men financially. Arrange loans for them and they can also be given relief on delay in repayment of a loan. Not only this, but banks have also been explicitly instructed that they will give preference to lower-and middle-class people in loan disbursement.

Troubles of banks with the Act

The biggest difficulty of banks is that their NPA is increasing. In 2019, the NPA increased to around Rs. 10 lakh crore. Most of the NPA cases are related to loans. Banks have released money for loans to a large number of people, but their recovery has not been done. Many big industrialists are also involved in this, who have been declared defaulters due to inability to repay the loan amount. They have fled the country after securing loans worth billions of rupees from banks. Apart from this, loans were also sanctioned to promote small companies, development authorities, and cottage industries, but in most cases, banks have not been able to recover.

The attitude of banks for recovery

The SARFAESI Act gives a range of powers to banks. It also includes debt collection rights. It has been said by RBI that banks can recover their loans from people. However, banks have also been accused of misusing this law. In many cases, extortion was done by banks. The banks used to threaten the borrowers by reaching home and then dragging the vehicles in the case of personal loans. Lawsuits were also filed against them in the respective police stations, due to which the common people, who were unable to repay the loan, had to face many challenges.

Banks cannot mistreat borrowers using this Act

True that the SARFAESI Act 2002 gives banks the right to recover loans, but banks cannot mistreat borrowers for this. Recovery agents can go to people’s homes only between 7 am to 7 pm. Can talk to them. Consumers can adopt legal processes matching their needs. If any kind of misbehavior is done by the recovery agents, then customers can complain to the banks. In the absence of a hearing in the banks, the voice authorities can also be written.

SARFAESI Act 2002 for co-operative banks

The Supreme Court has said in a case that the SARFAESI Act will be applicable in co-operative banks as well and such banks are covered under it. Debt collection is an essential part of banking activity and this cannot be excluded from this Act. However, the court has also instructed banks to listen to the customers or borrowers before taking any action.

Ways to repay your home loan EMIs during difficult times


  • Use of an emergency fund

It’s advisable to maintain an emergency fund by either keeping the amount in a savings account or in some debt instrument such as fixed deposits.

Ideally, this fund should be at least six times your current monthly income. You could go for a bigger emergency fund savings if you want to. The emergency fund can help you pay your EMIs and keep you from defaulting.

  • Take loan insurance

There are various loan insurance plans in the market that can cover your EMIs for a short period. You can consider buying such a plan along with your home loan. A typical scenario where you will find this insurance useful is when you have lost your job. Hence, a loan protection insurance plan is a short-term measure, but beyond it, you will need concrete ways to repay your debt.

  •  Raise funds by disposing of assets

If you have exhausted your income and savings and are unable to repay the loan, then you can look at other options for raising some cash. You may dispose of your assets such as gold, a car that now seems like a luxury, electronics you don’t need, or withdraws some amount from any long-term investments such as Public Provident Fund (PPF).

  • Contact your lender and find a solution

When your inability to pay EMIs is due to a genuine reason such as loss of employment, a serious medical condition, or short-term difficulty, you can discuss the matter with your lender. You can try to persuade your lender to understand your difficulties and convince them that you can resume your loan re-payments soon.
You can show your track record of repaying your previous loans (other than home loan) on time in order to convince the lender. On a case-to-case basis, after an evaluation of your credit history and your current difficulties, your lender may agree to offer you some options that can ease your financial stress. These options include:

i) Grace period:A brief moratorium on re-payments of loan can be given to you by the lender, that is, a short time period during which you do not need to pay your EMIs to enable you to recover yourself from your short-term difficulty and re-start re-paying the home loan.

ii) Refinancing/restructuring of loan:Restructuring of your loan- where the lender can increase the loan tenure and reduce your EMI amount – can also help you.

  • Interest rate reduction

A lower interest rate may be offered to you with certain terms and conditions. The lender can reduce the rate of interest on your loan provided such rate is non-discriminatory and is as per the published rate grid. However, case-specific interest rate reduction to a level below the rate grid is neither permissible nor customary, except in case of a settlement in which case the home loan account would be classified as a ‘settled’ or ‘written off’ (partially or fully) account. “In such a case, the bank will have to recognise the loan as a write-off and your credit score would also be negatively hurt. Hence, it is in your interest to not get caught in a legal tangle and instead find a way to repay your loan. Therefore, maintain contact with your lender and go over any options you may be offered.