If the person taking the loan dies? So who has to pay the arrears, know the rules here

If you also want to buy something or get something you need, then you need money for that. For this, someone does a job or someone earns by doing his work, etc. But there are many occasions in life when people need a lot of money and in such a situation they have to take a loan from the bank. Then the bank also takes back this loan with interest, but just imagine that the person who has taken the loan dies due to some reasons, then what will happen to the loan? Will the bank waive the loan or who will have to clear the outstanding amount? If you also want to know about this, then let's try to know. You can learn more about it in the next slides...

A personal loan comes under the category of an unsecured loan, due to which the borrower dies due to any reason. Then the bank cannot take money from the legal heir, heir, or any other person. Credit cards fall under the category of unsecured loans. Hence it is not considered a secured loan and in case of the death of a cardholder, the bank writes off the outstanding amount. Therefore, the bank cannot collect dues from any other person, heir, or legal heir.

Home loan comes under the category of secured loan. Hence, there is a provision to collect dues from the co-applicant in the event of the death of the borrower. Even on many loans, the bank insures at the time of taking the loan. Due to this, when the person taking the loan dies, the bank gets the outstanding amount from the insurance.

If a person has taken an auto loan and dies due to some reason, then the outstanding amount has to be paid by the family members. If you are not able to do this, then the bank auctions the car and recovers its money.