What happens when our two-wheeler is recovered by the bank.

Most of us know that in India, 85% of the people finance their vehicle while buying, the majority in four-wheelers as compared to two-wheelers. And later pay a significant amount of interest as set by the particular bank on the cost of the vehicle by paying monthly EMIs. This is usually done as full payment is a hefty amount and sometimes not possible to pay in a single go during the delivery of the vehicle. Hence opting for a loan remains a great option.
As simple as it may sound, getting a loan from a bank for your vehicle is not easy as it may seem, and is not at all a cakewalk as you need to fulfill the particular bank’s criteria to check if you are eligible for the loan and if you are financially strong enough to pay monthly EMIs.
A very warm welcome to MOTORBHAI, a one-stop trusted place for selling and buying two-wheelers. We hope you and your loved ones are in the best of your health in tough times like these and are at home, safe. Today we would be talking about what happens if you do not pay your EMIs timely to the bank, and what are the consequences to it, and what happens to your vehicle after it is recovered by the bank.
So, without further wasting any time, let’s get started!
So as we have already mentioned, we have to pass the bank’s criteria in order to get a loan. We get the loan too. But what if, god forbid in the near future our financial condition takes a hit. Conditions like these do arise, when jobs are lost, businesses do not function smoothly, among others. In scenarios like these we are not in a position to pay the loans of our vehicle, and hence the monthly EMI bounces.
When you are not able to pay the EMI for the first time, you receive a call from the customer care of the bank reminding you about the due payment of that particular month and it is completely verbal communication. You can expect this just to be a reminder when you do not pay your first EMI.
After that when you skip the second EMI consecutively, you receive a call from the collection manager and the collection agency, asking for the payment and if in case you try to ignore them, you get a demand legal notice which is a kind of a warning stating that you have not paid a particular amount for the specific month.
Things get bitter if you do not pay your third consecutive EMI as well, as the bank prepares an NPA against you, which is Non-Performing Asset. The NPA is handed over to the agents of the collection agency who come to your residence to seize your vehicle and they also have the letter to seize your vehicle from the police.
If you try to ignore them by hiding the vehicle or by not attending them, the bank then takes this case legally. This is done, as during the loan process, you have to give the bank a blank cheque, and the bank now tries to withdraw the whole amount from this cheque, but as there is not enough amount in your bank amount the cheque will obviously bounce. And as soon as this cheque is bounced, there will be section-138 applicable to you, which is the dishonor of the cheque. And you receive a notice from the court. And as soon as you become a Non-Performing asset for the bank, your Cibil score also decreases, and due to this the probability of you getting a home loan, personal loan among others, etc. decreases, not from this particular bank but other banks as well in the future. To avoid all these legal mishappenings, it is much better to hand over the vehicle calmly to the officials. As they are anyhow going to seize the vehicle.
What happens when the bike is recovered by the bank?
After the bank has seized your vehicle, the bank keeps the vehicle in its warehouse, and within one month it tries to auction your vehicle. There are so many vehicles already there and these are usually bought by second-hand dealers. If in case the full amount is not satisfied by selling the vehicle, the owner needs to pay the remaining amount including the warehouse parking charges and court fees.
To avoid this situation, you can talk to the bank manager, as even they do not want such scenarios to occur with their banks and what they can do is, they can sell their vehicle to a specific third-party and later you can buy from them. This way the settlement can be done.
So, if in case god forbid anyone lands up in a situation like this, please do not hesitate and talk to the bank manager, as they can you very well, and they understand your condition very well.
Also, try to maintain a great equation with the bank as if your cibil score decreases, it could be quite difficult for you to get a loan in the future. Moreover, if your bike is seized, the remaining payment which you had already done is also deposited, and you do not get any kinds of returns.
With this, we would like to end this article here, and we hope this article would have helped you in some way or the other. Please feel free to mention your views about the article in the comments section below, and also do let us know if we have missed out on any crucial point, as your feedback is very important for us.
We would see you in yet another information-filled article super soon and till then please stay indoors, and stay safe!

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