A 22-year-old working professional has turned to Reddit for advice after finding himself struggling to repay loans taken by his parents. The debt was acquired by the family for business reasons during the Covid-19 pandemic.
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In a Reddit post, the young man explained that he had recently graduated from college and was earning an average salary. According to the post, much of his income was now going towards three loans taken by his parents. Two of the loans, worth Rs 5 lakh and Rs 12 lakh, are close to being fully repaid. The bigger concern is a Rs 22 lakh cash credit facility taken through Bajaj Finance, which was later converted into a term loan after the business started suffering losses.
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“The issue I am facing is….from my salary I am paying 3 loans my mom and dad took for their business during Covid to keep it afloat thinking things will get better after Covid of which 2 loans are small one Rs 5 lakh and one Rs 12 lakh, which is also only 6-8 installments short. The catch here is the Rs 22 lakh cash credit from Bajaj via the lender which was then converted into a term loan as they saw our business account book getting flat due to losses and losing money….,” the 22-year-old explained.
He further explained that while the family has paid their loans so far, they cannot afford it anymore. He also clarified that the loan is in his mother's name and was taken against business documents, including turnover and ITR papers.
“It was an unsecured loan on business machineries and turnover/ITR papers which is closed and we can't pay the installment any longer, so my question is what option do we have? My father is saying as it is an unsecured personal loan on business, we won't lose anything if we stop paying installment…the loan is in my mom's name,” the post further read.
As the post gained traction, many suggested the user seek a loan settlement with the lender.
“Look for a settlement option. The loan amount is huge and the bank will handover your recovery to private recovery firms. Your parents are badly advised that the bank cannot do anything. Bank staff won't get involved directly as it can cause problems to them but they will allocate your parents account to recovery form. This won't be good as they can trace your parents to their village,” a comment read.
Another user said that if the Redditor himself is not the guarantor then banks are unlikely to hold him liable. However, believing that the lender will not try to recover the money is a risky move.
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“Settlement later will be a huge amount. The bank will definitely try to recover the money. Talk to a lawyer for help. Do not decide based on online help only,” another comment read.
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