What happens if the loan is defaulted?

If a loan is defaulted, it means that the borrower has failed to make the required payments according to the loan agreement. The consequences of defaulting on a loan depend on the terms of the loan agreement and the laws and regulations of the jurisdiction in which the loan was issued. In India, the lender can take legal action against the borrower to recover the outstanding amount.

If the loan is secured, the lender may have the right to take possession of the collateral used to secure the loan. The lender may also report the default to credit bureaus, which could negatively impact the borrower's credit score and ability to obtain credit in the future. In some cases, the lender may also take legal action to recover the outstanding amount, such as filing a lawsuit or initiating recovery proceedings.