Borrower Dies: Who Pays the Personal Loan? Bank's Powers & Limits Revealed

• Personal loans are unsecured; banks first check for loan protection insurance or co-applicants/guarantors.
• If insured, the insurance company repays the loan; if co-applicant/guarantor, they become responsible for repayment.
• Without insurance or co-applicant, banks can recover from the deceased's assets like FDs, property, or life insurance claims.
• Legal heirs are only liable if they are co-applicants/guarantors or inherit property (up to the inherited value).
• Banks cannot threaten family or demand money from non-associated heirs; they may write off loans with no recovery options.

Why It Matters: Secure personal loans with insurance to protect your family from debt burden after your demise.