I have take a Loan Against Property from Cholamandalam (NBFC) ( BT done 5 months ago from Axis Bank) and missed my EMI for the first time and made partial payment also , I have a clear track record of more than 15 years of paying my EMIs on time , However past 6 months have been going through financial crisis , The NBFC team is pursuing me to clear the EMI within the same month , failing which, I have been told they will initiate legal action such as posting Notice on property, reporting to CIBIL and so on . THEY have called my bed ridden father and my wife and tried to reach out to them as they are co applicant / co borrower. I had asked the NBFC authorities in a verbal , to enable me to pay step up EMI (partial amount ) for few months till I am able to manage the challenging time , the authority responded in negative . I also told that I have put my property on sale , they replied it's a time taking process and we can't wait and we are bound to initiate action as per law for further procedures . I also told them that I wished to take Balance Transfer to other Bank .They said as you have missed a single EMI , things will not be easy and this will create a bad impact . They were hell bent to make me pay my balance EMI at any cost ( sell gold/ take loan from friends etc etc) I have not initiated any written or mail communication. Yet . What are the options available for ME ? What are my rights and How to protect myself and the actions associated ? What Are the rights with NBFCs ? How to safeguard myself and what should I tell my father and wife to tackle this ?
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1) pay the balance amount for this month EmI
2) You can request finance company to reschedule your loan
3) increase tenure and reduce EMI
4) you can seek balance transfer to another bank
5) if you fail to pay EMi account can be declared NPA if the minimum amount due,
as mentioned in the statement, is not paid fully within 90 days from the payment due date mentioned in the statement.
- 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.
- The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act is a powerful instrument in the hands of the banks and financial institutions (FIs) as secured creditors.
- In case of default of the emi , the bank can send a notice for the payment and to take legal action to auction the property on which loan was taken.
- You can show your poor financial status to the bank after sending a written application
- Further, request to give more time to pay after extending the loan tenure.
If you fail to pay an EMI, an NBFC can take legal action, potentially leading to asset seizure, wage garnishment, and a lawsuit, which can negatively impact your credit score and future financial opportunities.
Missing payments will be reported to credit bureaus, leading to a drop in your credit score, making it harder to get future loans.
Before resorting to legal action, the lender may attempt to negotiate with you or offer a settlement option or you can initiate the same from your end.
The Reserve Bank of India (RBI) has guidelines for personal loan defaulters, and lenders must follow a methodical process for debt recovery, including sending reminders and offering restructuring option. Your lender also has to follow the same.
If you don't pay back an unsecured loan in India, the lender may take legal action to recover the outstanding debt. This can involve filing a lawsuit against you, seeking a court order to reclaim the loan amount
Therefore you may better pay the pending EMI amount and apply for transfer of loan to any other NBFC or bank to avoid further problems.
You need to pay the emi or can buy sometime from bank if your financial condition is not stable. If your account turns NPA bank may initiate action under Sarfesi act against you
Dear Client,
As you have a Loan Against Property (LAP) with Cholamandalam (NBFC) and have defaulted on an EMI for the first time because of financial constraints, you must safeguard your rights while dealing with the lender. Here is a legal approach to deal with the situation efficiently:
1. Your Rights as a Borrower
No Immediate Legal Action for First Default:
Having no single EMI does not necessarily result in legal proceedings.
NBFCs must follow RBI’s guidelines and cannot harass or intimidate borrowers.
They can only initiate legal recovery after 90 days of continuous non-payment, when the account is classified as NPA (Non-Performing Asset).
Protection Under RBI’s Fair Practices Code:
NBFCs cannot use coercion, threats, or harassment to collect dues.
They must provide written notices before taking legal action.
Calling a home-bound father and harassing family members is againstlaw and RBI protocols.
Right to Seek Restructuring of EMI:
According to RBI's Resolution Framework, the financially stressedborrowers can approach a loan restructuring.
The lender cannot deny a Step-Up EMI or Loan Restructuring Request outright.
Right Against Public Notice or CIBIL Reporting Without Due Process:
NBFCs cannot serve notices on your property or report to CIBIL without going through due process.
CIBIL impact only occurs after continuous 90-day default (NPA classification).
2. What the NBFC Can Legally Do?
Initiate Legal Recovery After 90 Days of Non-Payment:
If you fail to pay 3 consecutive EMIs, they can classify the loan as NPA and initiate recovery under the SARFAESI Act, 2002.
They must issue a 60-day demand notice before taking possession of the property.
Report Default to CIBIL After Prolonged Non-Payment:
If you fail to pay beyond 90 days, they may report your account as NPA, impacting your credit score.
A single missed EMI will not immediately affect CIBIL.
Reject Balance Transfer Requests in Case of Default:
Since you missed an EMI, other banks may hesitate to approve a balance transfer.
However, if you clear pending EMIs, you can apply again.
3. How to Protect Yourself?
(A) Send a Written Communication to NBFC
Immediately email/write to Cholamandalam, stating:
You are facing temporary financial hardship but are committed to repayment.
You request a Step-Up EMI plan or a Restructuring option.
You have put the property on sale and need time to arrange funds.
You are willing to pay partial EMIs consistently to avoid default classification.
Request a written response to ensure legal protection.
(B) Prevent Harassment of Family Members
Formally complain to NBFC’s grievance redressal cell stating:
Family harassment is against RBI’s Fair Practices Code.
Calls to your bedridden father and wife violate collection norms.
If harassment continues, you will file a police complaint and escalate to RBI Ombudsman.
(C) Ensure They Follow Legal Recovery Steps (If It Reaches That Stage)
If you are over 90 days past due:
They must issue a 60-day SARFAESI notice before taking legal action.
You can still repay during this period to stop property attachment.
(D) Keep Your Property Sale/Balancing Transfer Option Open
Once you clear the pending EMI, apply for balance transfer with another bank.
Where balance transfer is unsuccessful, negotiation with NBFC to restructure for a longer period loan can assist.
4. What to Tell Your Father & Wife?
Instruct them NOT to entertain NBFC calls.
If NBFC representatives visit home, politely inform them that:
All communication should happen directly with you.
Harassment complaints will be filed if they continue targeting family.
Ask them to keep records of any harassing calls (date, time, and conversation summary) for legal complaints.
5. Next Steps
✅ Step 1: Write an immediateemail/letter requesting EMI restructuring or part payments.
✅ Step 2: Lodge a grievance complaint against family harassment to NBFC’s Customer Care & RBI Ombudsman.
✅ Step 3: If harassment continues, file a police complaint for intimidation and mental harassment.
✅ Step 4: If unable to pay fully, ensure at least partial payments to avoid NPA classification.
✅ Step 5: Seek out balance transfer features or negotiate a longer loan period.
Final Advice Do NOT panic—a single missed EMI will not result in immediate legal action or property loss. Document all communications with NBFC to protect yourself legally. Seek balance transfer options after settling overdue EMI. If harassment continues, report complaints to the RBI Ombudsman.
For detailed, personalized advice, consider a phone consultancy. Hope you find the information helpful. You are free to contact me for further discussion. If you could spare two minutes of your time to write a review, it would be greatly appreciated and bring immense happiness to read it. Thank you. Shubham Goyal.
Dear sir,
You are suggested to proceed in writing to the said NBFC and request as per your circumstances.
