New Delhi, Aug. 15 -- Borrowing has become an integral part of household finances, whether it is to buy a home or vehicle or meet short-term expenses through personal loans and credit cards. But a job loss, income disruption or an unexpected financial setback can sometimes make it difficult for a borrower to keep up with repayments.

Missing a loan EMI can trigger reminders, penalties and eventually recovery proceedings. But a default does not give a bank unlimited powers over a borrower or allow recovery agents to use threats and intimidation.

The rules depend on the type of loan, the extent of the default and the legal process followed by the lender.

"A single missed EMI does not give the bank the right to seize the borrower's propert...