A homebuyer has stopped paying EMIs on a Rs 39.92 lakh home loan. This is according to reporting by The Economic Times. The reason, as reported, is that the builder sold his flat to another buyer.
If you're ever in this spot, don't simply stop paying and wait. Missed EMIs hurt your credit score and can start bank recovery action. Fix the legal side first, and speak to your lender early.
Key takeaways
- A buyer reportedly stopped EMIs on a Rs 39.92 lakh loan after his flat was sold to someone else.
- Your loan is a separate contract with the bank. It doesn't vanish if the builder cheats you.
- Missed EMIs can hurt your credit score within weeks.
- After 90 days of non-payment, a bank can mark the loan as a bad loan.
- Write to the bank, the builder and the police early, and keep proof.
How a home loan works when the flat is not delivered
When you take a home loan for an under-construction flat, the bank pays the builder in parts. These parts are tied to construction stages. The bank then collects EMIs from you.
Your EMI is the fixed monthly payment that covers interest and part of the loan. You owe it to the bank, even if the builder fails you. That is why this case matters.
The bank has also taken a claim on the flat as security. If the flat is sold to another buyer, that security gets messy. The bank may ask the builder questions too. But you are still the person named on the loan.
What missed EMIs cost you
Let's use round numbers. Say the loan is Rs 39.92 lakh at 9% for 20 years. The EMI would be about Rs 35,900. You can test your own numbers with the EMI calculator.
| Item | Approximate amount |
|---|---|
| Loan amount | Rs 39.92 lakh |
| Monthly EMI (9%, 20 years) | Rs 35,900 |
| Three missed EMIs | Rs 1.08 lakh |
| Late fees and penal charges | Extra, set by your loan terms |
| Days unpaid before a bad loan tag | 90 days |
The three missed EMIs alone come to over a lakh rupees. Late charges get added on top. The bigger damage is to your credit score, which lenders check for years.
RBI rules say a loan unpaid for 90 days can be marked a non-performing asset. That means a bad loan. Once that happens, the bank can start recovery steps under the law.
Who is affected
This matters most to people who buy under-construction flats. Their money goes out before they get keys. It also matters to anyone who buys in a project with a weak track record.
First-time buyers are at higher risk. They often skip the title check because they trust the builder. Families who pay a big EMI and rent a home at the same time feel the squeeze most.
If you've already taken a loan, read your loan agreement. See what it says about disputes and builder default. You can also read our home loan guides for the basics.
What to do now
If your flat is delayed, disputed or sold twice, follow these steps:
- Collect every paper: allotment letter, builder agreement, payment receipts and bank statements.
- Write to the builder in a formal letter, and keep a copy.
- Tell your bank in writing about the dispute. Ask what options exist.
- File a complaint with the police if you suspect cheating.
- Approach the state real estate regulator, called RERA, for a refund or possession.
- Talk to a property lawyer before you stop any EMI.
If you can afford it, keep paying the EMI while the case runs. Banks are often more flexible with customers who stay in touch. You can also check your fresh borrowing power on the eligibility page.
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Frequently asked questions
Can I stop paying my home loan EMI if the builder cheats me?
Not safely. The loan is a contract with the bank, and it stays in force. Missed EMIs can hurt your credit score and lead to recovery action.
What happens if I miss home loan EMIs for 90 days?
The bank can classify your loan as a non-performing asset, or bad loan. It can then begin legal recovery under the law. Your credit score will also fall.
How can I check a flat before buying it?
Check that the project is registered with the state RERA. Ask a lawyer to verify the title. Also confirm the flat number and payment stages in writing before you pay.
BankCreds analysis
The real cost is not the EMI
Most people think the risk is the monthly payment. It's not. The bigger risk is the lost time and the credit damage while a legal case runs.
Take a Rs 39.92 lakh loan at 9% for 20 years. The EMI is about Rs 35,900. Pay it for two years while you wait for a court. You will have paid close to Rs 8.6 lakh. You may have no flat to show for it.
Stopping EMIs feels like protest. In practice the bank still holds a claim on you. A score drop can also raise the rate on your next loan.
What this does not mean
One reported case doesn't mean most builders double-sell flats. Still, it shows why a clean title check matters. Pay the builder only against documented stages, and keep every receipt.
This section is BankCreds' own assessment of what the development means for Indian borrowers and savers. It is independent commentary, not part of the source reporting above.
Sources & references
- The Economic Times — originating report https://m.economictimes.com/wealth/legal/will/homebuyer-stops-paying-emis-on-rs-39-92-lakh-home-loan-after-builder-sells-his-flat-to-another-buyer-karnataka-hc-quashes-banks-criminal-case/amp_articleshow/135223213.cms
- RBI Master Directions — Rules on classifying loans unpaid for 90 days as non-performing assets https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx
- Reserve Bank of India — Regulator of banks and housing finance lenders https://www.rbi.org.in/
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Editorial note & disclaimer
How this was reported. The development above is attributed to the source or sources listed. BankCreds does not independently verify a third party's reporting; where a figure or a regulatory position is stated as fact, it is either attributed or drawn from the regulator's own published material. Everything under "BankCreds analysis" is our own assessment.
Rates and figures. Interest rates, per-gram values and premium bands quoted here are indicative, move daily, and differ by borrower profile, city and lender policy. Confirm the final number with the institution before you act on it — the sanction letter or policy schedule governs, not a news report.
Not financial advice. This article is general information for an Indian audience. It is not investment, tax, credit or insurance advice, takes no account of your circumstances, and BankCreds is not a lender, broker, distributor or advisor. Consider speaking to a SEBI-registered investment adviser or a qualified professional before acting.
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