Understanding the Consequences of Not Repaying Personal Loans in India
Defaulting on a loan is a civil matter, not a criminal one. This means that the lender can sue you in court to recover the debt, but they cannot have you arrested.
However, there are some cases where you could face criminal charges for not paying a loan. For example, if you took out a loan using forged documents, or if you used the loan money to commit a crime, you could be charged with fraud. Additionally, if you issue a cheque to your lender and it bounces, you could be charged with cheque bouncing, which is a criminal offense punishable by imprisonment.
If you are unable to repay your personal loan, it is important to communicate with your lender as soon as possible. They may be willing to work with you to create a repayment plan that is affordable for you. If you are unable to reach an agreement with your lender, they may sue you in court. However, even if you lose the lawsuit, you will not be sent to jail.
Here are some tips for dealing with a personal loan default:
- Contact your lender as soon as possible to let them know that you are having difficulty making your payments.
- Be honest and upfront about your financial situation.
- Work with your lender to create a repayment plan that is affordable for you.
- If you are unable to reach an agreement with your lender, you may want to consider seeking legal advice.