A 22-year-old man’s family financial problems have sparked a discussion online after he turned to Reddit for advice about a Rs 22 lakh loan. The young man, who recently graduated from college and started working, says a large part of his salary is going towards repaying loans taken by his parents for their business during the Covid-19 pandemic. However, the situation has become more complicated as his father is now considering stopping the repayment of the biggest loan, believing that the lender cannot do much because it is unsecured. The young man is worried about the consequences and wants to understand what his family should do next.
22-Year-Old Seeks Help After Family Takes Three Loans
According to a report by NDTV Profit, the young man explained his family’s financial situation in a Reddit post.
His parents had taken three loans to keep their business running during the Covid-19 pandemic. At that time, they reportedly believed that business conditions would improve once the pandemic ended.
However, the business continued facing difficulties, and the family struggled to manage the repayments.
The three loans included amounts of Rs 5 lakh, Rs 12 lakh and Rs 22 lakh.
The young man said the smaller Rs 5 lakh loan was almost repaid, while only around six to eight instalments were remaining on the Rs 12 lakh loan.
But the biggest concern was the Rs 22 lakh loan, which had become a major financial burden for the family.
Rs 22 Lakh Loan Became The Biggest Problem
The young man explained that the Rs 22 lakh borrowing was initially a cash credit facility obtained through Bajaj Finance.
A cash credit facility is generally a type of business borrowing that allows an eligible business to withdraw money up to an approved limit to manage its working capital requirements.
However, after the business started suffering losses and its account activity weakened, the lender reportedly converted the facility into a term loan.
This meant the family had to manage regular instalments instead of relying on the earlier credit arrangement.
The situation became increasingly difficult as the business was no longer generating enough money to comfortably support the repayments.
For a small business owner, such financial pressure can become particularly challenging because business income is not always predictable.
Why Does His Father Want To Stop Paying The Loan?
The most concerning part of the Reddit post was the father’s approach to the outstanding loan.
According to the young man, his father believes that the family will not lose anything if they simply stop paying the instalments because the Rs 22 lakh borrowing is unsecured.
The loan is reportedly in the mother’s name and was obtained using business-related documents, including turnover and income tax return papers.
The father apparently believes that since the loan is not secured by conventional property collateral, the lender cannot take any major action.
However, this assumption can be risky.
An unsecured loan does not mean that the borrower has no repayment responsibility. A lender can still pursue recovery through applicable legal procedures, report defaults to credit information companies and take other steps permitted by the loan agreement and law.
The exact consequences depend on the loan documents, guarantees, security arrangements and applicable legal provisions.
Loan Is In Mother’s Name: Can The Son Be Held Responsible?
One important question raised by the story is whether the 22-year-old son can become legally responsible for his parents’ loan.
Generally, simply being someone’s son does not automatically make a person responsible for repaying their parents’ borrowing.
The position can be different if the son has signed as a co-borrower, guarantor or otherwise accepted a legal repayment obligation.
That is why checking the original loan agreement is extremely important.
The family should verify whose name appears as the borrower, whether any guarantor is involved and whether any assets or other security have been pledged.
The mother, being the reported borrower, should also understand the possible consequences before the family decides to stop paying instalments.
What Happens If The Family Stops Paying EMIs?
Many people assume that an unsecured loan becomes irrelevant if the borrower stops making payments.
But defaulting on a loan can create several financial problems.
First, overdue interest and applicable charges may increase the outstanding amount. The lender may also report missed payments to credit information companies, affecting the borrower’s credit history.
Second, the lender may begin contacting the borrower regarding repayment and initiate recovery proceedings as permitted under the agreement and applicable law.
Third, the family may find it more difficult to obtain loans or credit cards in the future.
A poor repayment history can affect financial opportunities for several years.
It is therefore important to understand that stopping payments without a proper plan may make an already difficult financial situation worse.
Reddit Users Suggest Loan Settlement And Legal Advice
After the young man shared his problem, several Reddit users suggested that the family explore a possible loan settlement with the lender.
A settlement is an arrangement in which a lender agrees to accept an amount different from the full contractual dues to resolve an outstanding loan, subject to agreed terms.
However, borrowers should understand that settlement is not the same as completely repaying a loan.
A settled account may be reported differently from a fully closed account and can negatively affect future borrowing opportunities.
Some Reddit users also warned the young man against relying on his father’s assumption that the lender could do nothing.
Others recommended consulting a lawyer before making any decision.
The general advice was that the family should communicate with the lender, understand its options and avoid making decisions based only on online comments.
What Should Indian Families Do When They Cannot Pay EMIs?
Financial difficulties can affect any family, especially when a business experiences losses or income becomes uncertain.
However, ignoring loan repayments is rarely a sensible first step.
Families facing similar situations should consider the following measures:
1. Check All Loan Documents
Understand the outstanding principal, interest rate, remaining tenure, repayment schedule and legal obligations. Check whether the loan is actually unsecured.
2. Contact The Lender
Explain the financial difficulties and ask whether restructuring, revised instalments or another repayment arrangement is possible.
3. Explore Settlement Carefully
If regular repayment is genuinely impossible, ask the lender about a written settlement proposal. Understand the total amount, payment deadline and credit-reporting consequences before accepting.
4. Consult A Financial Or Legal Expert
A qualified professional can examine the loan agreement and explain the borrower’s rights and responsibilities.
5. Avoid Taking Another Expensive Loan
Using credit cards or high-interest personal loans to repay existing debt can create an even bigger financial problem.
RBI Rules Also Protect Borrowers From Recovery Harassment
While lenders have the right to recover outstanding dues through lawful methods, borrowers also have certain protections.
The Reserve Bank of India has instructed regulated lenders and their recovery agents not to use intimidation, physical or verbal harassment, public humiliation or threatening communication.
RBI guidelines also restrict recovery calls before 8 am and after 7 pm.
Borrowers facing harassment can approach the lender’s grievance redressal department and, where eligible, escalate unresolved complaints through the RBI’s complaint mechanism.
Knowing these rights is important because financial difficulty does not mean borrowers lose their right to fair treatment.
A Family Loan Should Not Destroy A Young Person’s Future
The 22-year-old’s situation highlights a difficult reality faced by many young working Indians.
Children often want to support their parents, especially when a family business or household faces financial problems. Helping parents is understandable, but taking responsibility for every financial decision without understanding the consequences can create long-term difficulties.
A young professional also needs money for personal expenses, savings, career development and emergencies.
The best solution is not necessarily to abandon family responsibilities, but to create a realistic repayment plan that everyone understands and can follow.
The family should calculate its total income, essential expenses and outstanding debts before deciding how much can actually be paid each month.