Personal Loan After Death: Who Pays? Crucial Rules Revealed!

• Personal loans are unsecured; banks cannot directly seize property after a borrower's death.
• If loan protection insurance exists, the insurer pays the outstanding amount, closing the loan account.
• Without insurance, banks can recover the outstanding amount from the borrower's estate (savings, FDs, property, life insurance).
• Family members are generally not liable for repayment unless they acted as a guarantor.
• Submit the death certificate to the bank immediately to initiate necessary processes and avoid harassment.

Why It Matters: Understand personal loan implications post-death; insurance and timely bank notification are key.