I resigned from my job in August last year due to some workplace issues. I had taken a personal loan worth Rs 3 lakh. I was confident that I would get a job in next three to four months. But, I am still jobless. I have savings only to last another two months. I have three credit cards (with credit limit of Rs 50,000 each), two of which have crossed the credit limit. I have not paid the bill for the last two months as well. I cannot take money from my father as he is retired. What can I do to get out of the debt trap?
You have two problems — managing income and debt. Keep looking for a job, but considering that it has already taken a long time, you need to look at self-employment to generate income. Depending on your skill set, you may undertake work like tuitions, selling insurance, data entry etc. Outstanding amount on credit card attracts highest rate of interest and penalties. I will recommend you to speak to the card issuers and request them to convert this amount into EMIs for the maximum tenure possible. This will not only be at a lower rate of interest, but will also free your credit limit. Use your credit card judiciously and do not exceed the limit. Also, pay the entire bill amount before the due date, since part payment will attract high interest.
For personal loan, you may request the bank for restructuring, failing which, you need to take them in confidence and suggest an alternate repayment plan so that collection agents do not follow up with you.
I had provided post-dated cheques for my car loan to the bank. For the last three months, they are not depositing the cheques and the EMI amount continues to stay in my savings account. What should I do? Can the bank impose any penal charge for this?
This is an operational error on part of the bank. Cheques are valid for a period of six months from the date of issue and they can be presented by the bank anytime during this period. It is advisable to keep sufficient balance in your account to honour the cheques whenever they are presented.
However, such delays often become a cause of dispute between the bank and the borrower, particularly since agreements may be drafted in a way that borrower is not absolved of his responsibility of ensuring timely payments. Not only the account will become delinquent and will get reported to credit bureaus like Cibil, bank may levy overdue interest on your account. Please get in touch with your bank and ask them to deposit the pending cheques. While doing so, please insist on taking a letter of waiver of overdue interest and a certification that says payment delay was due to a fault at their end and they will take care of your credit history with the credit bureaus.
I have defaulted on my credit cards and personal loan. The agents are continuously calling at my office and threatening to speak to my employers. They also threatened to freeze my salary account, which is with another bank. When I called the lenders to restructure the payments, the representative said such options do not exist. How do I stop this agent menace and get my loan restructured?
Generally, banks & their agents do not speak to the employer. In stray cases when they do, the employer can only try to persuade you to settle the matter with the bank unless the loan is guaranteed by them, or they have agreed to deduct your salary to pay the installments. Similarly, the lending bank cannot freeze your salary account with other banks. While restructuring of personal loans is not encouraged by the banks it may be done on the merits of the case. Similarly, credit card dues may be converted into EMIs by the bank. But both these are at the discretion of the bank. I’d recommend that you speak with the collection manager of the bank and convince him about your intention to repay and arrive at an agreeable plan.
The writer is a senior vice-president and group head, retail strategy & branding, at Arcil. Send your queries to yourmoney@bsmail.in
