Defaulting on a Car Loan can have severe consequences, including the repossession of your vehicle.

2) A loan is termed NPA typically after 3 missed EMis (i.e. three month of not repaying on loan).

3) Bank  will seize the vehicle based on the agreement signed by you 

4) make an offer for one time settlement of personal loan 

5) An unsecured personal loan is without any security or mortgage as guarantee for repayment and solely based on borrowers credit rating. Hence, assets cannot be appropriated. Recovery is based on the contract term of dispute resolution and through the process of law,

6) the Patna High Court has said that banks and finance companies cannot use recovery agents to forcefully seize vehicles of customers who have defaulted on car loans, without following the proper procedure under law.

7) you can complain to RBI against the bank 

-  As per the Patna High Court, the banks and finance companies cannot use recovery agents to forcefully seize vehicles of customers who have defaulted on car loans, without following the proper procedure under law.

- Hence, you can lodge a complaint before the police and higher official against the said bank 

- Further, the bank cannot attach the personal loan with the car loan , however for the recovery of the loan amount the bank can use the other accounts of the defaulter. 

- You can also file a complaint before the RBI as well against the bank. 

Obtain in writing from bank that car will be released on payment of balance outstanding car loan 

2) bank may settle for principal amount and waive interest in case of personal loan as they do not have any collateral security 

3) bank can exercise right  of lien and use other accounts of defaulter to recover loan amount 

4) you need to engage a lawyer for drafting complaint to bank as well as RBI 

 A bank can seize a vehicle if the borrower defaults on loan repayment EMIs, but they must follow the proper procedure: 

Lenders typically initiate repossession after 60 to 90 days of missed payments.

Lenders must comply with the SARFAESI Act and RBI guidelines.

They must also provide reasonable notice to the borrower before selling the asset.

Banks and finance companies cannot use recovery agents to forcefully seize vehicles. The Supreme Court has ruled that the recovery process must be in accordance with law and not by use of force.

No doubt the financer has a right to take over the possession of the vehicle but the contract agreement does not give authority to the financier to take over the possession of the vehicle forcefully.

RBI guidelines have emphasised that repossessions clause in the contract should be legally valid, should comply with the provisions of the Indian Contract Act in letter and spirit and banks should ensure that such repossession clause is clearly brought to the notice of the borrower at the time of execution of the contract.

You can issue a legal notice to the bank and demand explanation for their unjustified action and also file a criminal complaint agaisnt the agents who seized the vehicle forcibly citing illegal act by the bank agents 

1. The bank may furnish NOC only if the entire outstanding loan including the accrued interest has been fully paid and the loan is fully discharged.

2. If the bank is insisting on repayment of the personal loan then they may not release the car even if you are ready to pay the arrears of EMI amount 

3. A loan write-off is when a lender recognises that a loan or debt has become uncollectible and removes it from their financial records as an asset. In other words, the lender acknowledges that they are unlikely to recover the outstanding amount of the loan, and they decide to close the account. However, it doesn't mean the borrower is no longer liable for the debt. The lender can continue to pursue debt recovery through legal action or debt collection agencies.

4. A bank cannot use another account of a defaulter to recover a personal loan unless they follow a legal process. Lenders can only seize a borrower's assets if they have a court order and follow due process.

5. You can contact an advocate either from this forum or outside and engage the services of the chosen advocate on the terms of the chosen advocate

1. Yes

2. Yes, however you should contact the bank before paying the balance loan amount.

3. As per the RBI, the bank should give proper time and offers for the settlement of loan amount. on the ground of health and sudden loss.

4. Yes, the bank can use other accounts in the same bank only of defaulter for loan recovery 

5. You can taker services of any lawyer of this website 

- Online LAW degree holder cannot practice as a Lawyer