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If a person dies after taking out a personal, home or car loan, will family members have to pay the money?

Sagar Patel

By Sagar Patel

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mortgage loan Image credit source: Freepik

From buying a phone to buying clothes, almost everything is available on loan these days. Customers make purchases with credit cards or obtain financing directly from the bank. Along with all this, there is a need for three types of loans at some point in a person’s life, which include personal, home and car loans. If you are also paying EMI for such loan or have ever thought of applying for it, then you must know this rule.

Different rules for different loans

Have you ever wondered who pays the bank dues in this situation, whether the heir has to pay the remaining loan or is there some other rule? If you also want to know the answer to this question, this story is for you. Today we will know what rules have been set for each loan regarding loan repayment after death.

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What are the rules in the mortgage loan?

In fact, whenever a mortgage loan is taken out, the papers of the house are mortgaged against the loan, that is, the house is mortgaged. In the case of a mortgage loan, when the borrower dies, the liability falls on the co-borrower. Or the responsibility for depositing the loan falls to the person’s heirs, and the responsibility is given to them only if they can repay the loan.

Apart from this, they are given the option of repaying the loan by selling the property. Even if this does not happen, the bank auctions the property held in lieu of the loan and recovers the outstanding loan amount. Apart from this, many banks have started using a new option. In reality, the bank carries out insurance at the time of taking the loan and if the person dies, the bank recovers it through the insurance. Therefore, whenever you apply for a loan, you can ask the bank about this insurance.

What are the personal loan rules?

Personal loans are not secured loans. In such a situation, in case of personal loan and credit card loan, after death, banks cannot recover money from any other person. Furthermore, the heir also has no responsibility regarding the personal loan. In such a situation, the loan also ends upon the death of the person.

What are the car loan rules?

Car loan is a type of secured loan. In this situation, if the person dies, the bank asks the family members to repay the loan. If you don’t repay the loan, the bank recovers the loan amount by selling the car.

Sagar Patel

Sagar Patel

I am Sagar Patel, specializing in business news reporting. With a keen focus on economic trends, market analysis, and corporate developments,

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