The home borrower has certain rights during the obtaining of home loans, after obtaining home loans, and in case of the default of home loans. In case of the lender not cooperating, the borrower can complain to the consumer forum department or the Reserve bank of India against the lender. There are also various campaigns being launched by the reserve bank, which alerts the customers to know their basic rights and be alert while taking the home loans. The borrower can avail of loans from any of the lenders of the individual’s choice. And should remember that all the lenders are covered under the control of RBI. Thus, whether it is a cooperative, public sector, private, or the NBFC, the bank is covered under the reserve bank. Thus the borrower if finds that the lender is cheating the borrower, then, in that case, the borrower can complain at any moment. Also, in case of default, the borrower has the right that the lender should not harass the borrower. The Reserve bank takes strict action against the malpractices carries out by the lender. The RBI had passed the circular regarding the harassment of the borrowers, and many of the lenders had agreed that they would follow only legal procedures against the defaulters and would not harass them.
Also, the borrower should be alert while proceeding with the loans. The borrower should read the documents carefully of the loan agreement and ask questions related to any doubts to the banker. The borrower should read & understand the terms & conditions carefully before availing of the home loans. The borrower also has to right to get the terms & conditions of the document edited in case of the existing ones are found to be misleading. Also, the borrower can avail of loans from another borrower if the existing lender is not ready to change the terms & conditions. The borrower has the right also to change the lender and switch over the loans to another lender to avail of loans at lower interest rates. In case of a lower CIBIL score, the bank has the right to reject the borrower’s loans application as the banks are very careful while extending the loans to the borrowers. The borrower cannot challenge the lender in case of the rejection of the loans due to a poor CIBIL score.
Following are the rights of the borrower while availing loans from the lender:
- Right to avail loans from any of the lenders:
The borrower has the full right to avail of loans from any lender in case of availing loans. It is not mandatory to have a bank account with the lender to obtain loans. The loans can be taken from either a bank or an NBFC as well. The ideal lender is the one who should be charging the lowest interest rates to the borrower and the lower processing fees as well.
- Right to transfer the loans:
The borrower has the right to transfer the loans to another lender in case of the lower interest rates being offered by another lender. The borrower can transfer the remaining balance to another lender and pay the remaining installments by transferring the loans to another lender. As the interest amount is calculated on a cumulative basis, the borrower can save a huge sum on repayment in case of the loans offered at lower interest rates to the borrower.
- Right to avoid getting harassed in case of default of loans:
The bank is entitled to take only legal action against the defaulters of the loans. The bank has no right to harass the borrower in case of default of loans, and the borrower can complain to RBI in case the borrower is harassed due to the default of loans.
- Right to pre-pay the loans:
The borrower has the right to pre-pay the installments of a higher amount in the home loans. The borrower usually cannot be charged with the penalty for the pre-payment of the loans unless it is written into the agreement. The borrower has the right to avail rebate from the bank in case of the pre-payment of the loans.
The above rights have been given to the borrower in case of obtaining the home loans. The lists of rights are long, but few have been mentioned in the content. The borrower can make use of the rights mentioned above and, in case of the borrower feeling cheated, can complain to the Reserve bank for the rights being given to the borrower.