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Old 29th November 2011, 21:33   #61
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

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Originally Posted by scopriobharath View Post
bblost,

Any special reason why you took a personal loan for a car ? Interest rates are 16-25% for personal loan but only 13% at the max for used car loan.

Was it "hypothecation" or something else that made you go for a personal loan ?
As I work in a large MNC, banks give very good rates for personal loans.
When I purchased the car and also the bike the roi was very competitive and absolutely no hassles.

The bike cost me 82k.
I took a personal loan for 80k.
3 years duration. I needed a Bike, dad had said clearly if you are buying a bike then get a RE or don't buy it.

The car loan again was just 2.25 lakhs. 3 years duration.

The bike was bought with just my heart and soul in it. The car when I was married and hence a lot of thought went into it.
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Old 30th November 2011, 19:49   #62
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Default Re: Finance companies cannot forcibly take possession of loan-default vehicles

I spoke to someone who is attached to loans and borrowing.

I did some study and legally Hypoethecation means "The borrower retains ownership of the collateral, but it is "hypothetically" controlled by the creditor in that he has the right to seize possession if the borrower defaults". So the Finance company has the rights to seize the vehicle when the borrower is a defaulter and the borrower MUST cooperate in handing over the possession of the hypothecated object.

Ideally they must bring police along while this operation is happenning. In most cases of default, seizing the vehicle does not help because the vehicle is battered and horribly maintained that selling it would not even yield 25% of the loan value. Hiring a goon is cheaper, more effective and only requires a "one time payment".
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