What happens if I default on the top-up two-wheeler loan?

Defaulting on the repayment of a two-wheeler loan top-up can have serious consequences:

• Penal Interest: The loan provider will levy additional default interest above your normal interest rate on the outstanding loan amount. This penal rate makes the loan costlier.
• Legal Notice: The financial institution will send you a legal notice demanding immediate repayment of the overdue amount, along with interest and charges.
• Repossession: If you fail to repay despite repeated notices, the loan provider can legally repossess your two-wheeler used as collateral.
• Auction of Vehicle: The loan provider can auction the repossessed two-wheeler to recover their loan dues. You will not receive any money from such auction proceeds.
• Credit Score Decline: Default gets added to your credit report and can drastically drop your credit score by certain points.