I took two loans from the bank, one for ₹4 lakhs and another for ₹4.5 lakhs. The ₹4 lakh loan doesn’t have any security deposit, but the ₹4.5 lakh loan requires a ₹15 lakh deposit. I need to repay the ₹4 lakh loan and want to use the ₹15 lakh security deposit to do so. The bank manager won’t allow this, even though the deposit seems excessive for the loan amount. Is there any way I can use this deposit to pay off my ₹4 lakh loan?

Apni Law
Apni Law
Law Forum › Category: Banking / Finance › I took two loans from the bank, one for ₹4 lakhs and another for ₹4.5 lakhs. The ₹4 lakh loan doesn’t have any security deposit, but the ₹4.5 lakh loan requires a ₹15 lakh deposit. I need to repay the ₹4 lakh loan and want to use the ₹15 lakh security deposit to do so. The bank manager won’t allow this, even though the deposit seems excessive for the loan amount. Is there any way I can use this deposit to pay off my ₹4 lakh loan?
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Apni Law Staff asked 2 years ago

I took two loans from the bank, one for ₹4 lakhs and another for ₹4.5 lakhs. The ₹4 lakh loan doesn’t have any security deposit, but the ₹4.5 lakh loan requires a ₹15 lakh deposit. I need to repay the ₹4 lakh loan and want to use the ₹15 lakh security deposit to do so. The bank manager won’t allow this, even though the deposit seems excessive for the loan amount. Is there any way I can use this deposit to pay off my ₹4 lakh loan?

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Best Answer

Apni Law Staff answered 2 years ago

Indian law does not automatically allow you to use the security deposit for a separate loan. The bank has the right to determine the use of the deposit as per the loan agreement. However, you can attempt to negotiate with the bank manager, presenting arguments for the excess nature of the deposit and its potential for offsetting the ₹4 lakh loan.

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