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Date : Dec 7, 2007

Question

i have been granted a personal loan over telephone on my credit card standing five months back for an amount of rs 3,25,000. i did not give any sureity or collateral or signed any application to avail this loan. i was told post availing that emi of 11800 inclusive of serivce tax, surcharge on service tax. i paid first three emi and could not pay later for three months. fourth month i paid part of emi. the bank has foreclosed my loan and asking me to pay 4,08,000 in one lump sum which is not my capacity. i am ready to pay less emi over longer period but bank refused to accept my request. what should i do? can bank threaten me for this forced default, when the bank voluntarily offered the loan against my repaying capacity. i was not in a position to refuse it due financial needs at home? I requested the bank to reconsider the foreclosure and extend period of repayment many times over telephone. I dont have any means to repay full sum. Please advice.

Answer

you can try and negotiate with your bank about your payment. Alternately you can raise a loan against securities such as jewellery, National Savings Certificate, shares, mutual funds, LIC policies with higher surrender value. Typically secured loans have longer duration and lower interest rate.