If you do not pay the EMI of a loan or credit card for 90 days, then your account is declared as NPA.
Why does the bank make the loan NPA?
When the bank does not get payment for a long time, it has to declare the loan as NPA to avoid loss.
Types of NPA
1️⃣ Sub Standard Assets: Loan not repaid for 12 months.2️⃣ Doubtful NPA: Default for more than 12 months.3️⃣ Loss Assets: Which has no possibility of repayment.
How does the bank recover NPA?
✅ By selling mortgaged property✅ Through recovery agent✅ Through legal action
What will be the loss to you by becoming NPA?
❌ Your credit score may be affected.❌ It may be difficult to take a loan in the future.❌ The bank can take legal action against you.
Ways to avoid NPA
✔️ Pay EMI on time.✔️ Take a loan according to your income.✔️ Look for the option of restructuring the loan.
Reasons for the increase in NPA in India
📌 Economic recession📌 Deliberate non-payment of loan📌 Loan waiver due to political reasons
What is the solution?
If your loan has gone into NPA, contact the bank as soon as possible and try to repay by making a compromise.