Your questions – Loans: the bank can withdraw the assets of the guarantor if the loan is not repaid on time

The changes would be automatic when the repo rate changes.

By Chaitali Dutta

My husband died from Covid. He was the guarantor of the loan for his cousin’s hospital building and for his brother-in-law’s personal loan. How do I know which other loans he was guarantor for? What are its commitments that would take away assets that we could inherit?
—Bhargavi Joshi
First, you need to ask the two known parties to find another guarantor for their loan. When a person vouches, they get documents to record the details. These documents should be included in the documents. In the event that either of these two loans is in arrears now, the bank can acquire the assets of your late husband to repay the loan. While both loans are regular with no overdue amount, there is currently no liability. Financially, it creates uncertainty for you until the names of the guarantors are replaced.

I had applied for a student loan to study MBA in Australia. Since our college studies take place online and only have to pay a portion of the fees, can I defer the student loan?
—Ravi Amol
This will depend on the clauses mentioned in the education loan sanction letter. You can decide to take part of the loan amount and pass it on to the bank. However, if you do not withdraw any amount from the loan account, the bank may cancel the sanction. I suggest you take advantage of a small amount of the loan to keep the arrangement alive.

If I migrate my home loan from the marginal cost of finance (MCLR) based lending rate to the pension linked loan rate (RLLR), can I migrate back to the original type of MCLR?
—Kanakeswar Das
After the RBI circular on RLLR, all loan accounts are tied to the Repo rate. No new loan account will be sanctioned attached to the MCLR. Migration to the associated MCLR account will not be possible.

Why do I have to pay to reduce my interest rate on my mortgage?
—Satish Rajwansh
I’m assuming your current loan account is tied to MCLR. Therefore, the need to pay every time to reduce interest rates. Ask the bank to change your loan to RLLR where the interest rate is tied to the Repo rate. The changes would be automatic when the repo rate changes.

The author is the founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your questions to [email protected]

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