I took a house loan last year. The property price has fallen; will the bank recover the difference in price?
If the loan amount is linked to the property value, the bank will seek a revision of the terms
I took a house loan last year. The property price has fallen; will the bank recover the difference in price?
Rajesh Kumar, Lucknow
The loan amount is based on your ability to repay, or the worth of the property, or both. Most loans are based on the borrower’s income. Fall in the value of property will be a loss to the borrower, not the bank. If the loan amount is linked to the property value, the bank will seek a revision of the terms. In either case, the bank will act on possible default from fall in prices. You should use your own funds to the extent of expected decline in value, and take the loan only for the rest.