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What happens if the personal loan is defaulted?

Curious about a personal loan

What happens if the personal loan is defaulted?

If a personal loan is defaulted, it can have serious consequences on the borrower's financial situation. The lender can take legal action against the borrower and initiate debt collection proceedings. In India, the lender can also report the default to credit bureaus, which can negatively impact the borrower's credit score and credit history. This can make it difficult for the borrower to obtain credit in the future. Additionally, the lender can seize any collateral that was put up for the loan, which can result in the loss of the borrower's assets. It is important to carefully consider the terms and conditions of a personal loan before taking it out and to ensure that it can be repaid in a timely manner. If the borrower is experiencing financial difficulties, it is best to reach out to the lender and try to work out a repayment plan or explore other options such as debt consolidation or credit counseling.

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