If the borrower fails to service the OTS in a timely manner, then the bank reserves the right to cancel the OTS. As OTS is a legal & financial tool to recover the loan from the NPA borrower, and not paying the OTS within the deadline will be considered a breach of the agreement between the parties and allow the banks to cancel the OTS and forfeit the money deposited and adjust it once again toward the interest & penalties for which borrower has taken the waiver. Moreover, the borrower can request the bank for an extension of OTS in case he already deposited an ample amount of money as per OTS.
Banks cannot fund the OTS due to the strict guidelines of the Reserve Bank of India for not financing the NPA accounts in any way like funding an OTS or clearing total NPA account liability without OTS.
Yes, one can get a loan after one time settlement, but the cost may be higher than the standard market rate. For taking a loan after the OTS, one must take some small loans like auto loans or consumer loans which are much easier to raise and repayment of these small loans again boosts the cibil scores. So improved scoring and a good repayment track give confidence to new lenders.
Yes, closing an NPA account under the OTS affects cibil as it always shows a delinquent loan closed by taking a haircut from the bank, which means the client did not intend to pay the full loan amount and took the benefit of paying at a reduced price which ultimately gives financial loss to the previous bank.
Minimum loan borrower can get under OTS financing will be Rs.1 crore.
Maximum loan is never an issue. Loan amount more than Rs.50cr, 100 cr or Rs.200cr can be raised.
Yes, any person can get a loan for paying one time settlement, if he is offering well sufficient collateral most preferably twice of loan amount required and having running business making good cash flows or getting rental income which will be adequate to service the loan.
Getting a loan for OTS is off course a difficult task but not an impossible thing. First make sure, you are having ample property value to offer and good business cash flows or other source of income for repayment of this new loan. Then you need to look out for good consultancy company as they are more educated on the subject & ready connections for such transactions. Discuss on payment terms or consultancy fee with the agency ; finalize a agency who works on success fee model rather than asking for upfront payments.
Yes if you are living in any metropolitan or major city in India like Mumbai, Bangalore, Pune, Chennai or Delhi, then you eligible for this loan.
Any person living in any city or location of India is eligible for this loan. Plus borrower require to offer twice of collateral valuation for loan amount he required. And additionally a good repayment plan backed with strong business cash flows will resolve the purpose.
Yes in most of the case if borrower paid a ample amount of OTS say 30-40% of settled amount then bank can consider the extension of final repayment date. But it should be supported with proper reason & documentation for required time line.
Generally it is 4-5 years , but in few cases that can extended to 7 years also.
Yes this new loan for OTS can be paid directly to bank. Borrower need to submit a OTS letter to new lender or if it is extended then a final outstanding amount letter including interest needs to be submitted.
OTS Finance and Fund Source are two major companies in India for OTS (One-Time Settlement) and NPAs (non-performing assets). These companies only provide funds to the borrowers for the solution of their default loans.
No, there are no upfront fees or login fees required to initiate the loan process. One only needs to submit the required documents and sign an agreement.
The borrowers who do not have a running business can also apply, but they are required to secure the repayment of the loan through the sale of any of the collateral or by introducing a running company as a guarantor in this new loan.
