Home Loan Default? 3 Ways to Protect Your Property Before Auction

Kokila Chokkanathan
Getting a home loan is relatively easy, but repaying EMIs on time can sometimes be challenging. Missing three consecutive EMIs can lead the bank to:

· Declare your account as NPA (Non-Performing Asset)

· Categorize you as a loan defaulter

· Initiate property auction proceedings

But all is not lost! Here are three effective ways to save your property if you find yourself in this situation:

🔹 1. Negotiate a One-Time Settlement or Restructuring

· Contact your bank immediately to explain your financial situation.

· Banks often allow:

o One-Time Settlement (OTS): Pay a lump sum to clear dues at a discounted amount.

o Loan Restructuring: Extend tenure, reduce EMI temporarily, or lower interest rates.

· Action: Approach your lender before defaulting on more EMIs—early communication increases your chances of relief.

🔹 2. Apply for a Moratorium or EMI Holiday

· Some banks offer moratorium periods during financial crises, temporarily pausing EMIs.

· This helps you avoid NPA status and gain breathing space to arrange funds.

· Action: Check eligibility and submit a formal request to the bank with proof of hardship.

🔹 3. Explore Balance Transfer to Another Bank

· If your current bank charges high interest rates or is inflexible, consider a home loan balance transfer.

· Another bank may offer:

o Lower interest rates

o Flexible tenure

o Reduced EMI burden

· Action: Compare options carefully to ensure the new bank provides genuine relief.

🌟 Bottom Line

Defaulting on a home loan doesn’t have to mean losing your property. By:

· Negotiating early with your bank

· Applying for moratorium or restructuring

· Transferring your loan to a better lender

…you can protect your home and avoid an auction.

Pro tip: The earlier you act, the higher your chances of retaining your property without losing money unnecessarily.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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