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Defaults
Defaults
What happens if I default on my monthly repayment instalment for my housing loan?
If you default on your monthly repayment instalment, the bank can:
- Declare “an event of default” and recall the loan
- Charge you a higher rate of interest
- Sue you for the housing loan outstanding or initiate foreclosure (or both) to sell your property to recover the outstanding loan balance and unpaid interest. The bank can also sue you for any remaining sums unpaid if the sales proceeds from the property is insufficient to pay off the outstanding loan
- Bring bankruptcy proceedings against you
To avoid such situations, you should:
- Not commit yourself to a loan package that you cannot afford
- Contact your bank immediately for help when you face an unforeseen financial situation (e.g. sudden job loss) and find it difficult to meet your monthly repayment instalments. Do not wait until you default on your repayments