Bengaluru: Many people believe they can take out loans without worrying about repayment, assuming no serious consequences will follow. However, a recent case in Andhra Pradesh has shown that defaulting on loans can lead to severe legal repercussions.

Navi Finserv, a financial services company, took a customer to court for failing to repay a loan. The court ruled in favor of Navi Finserv and imposed a penalty of Rs. 83,000 on the defaulter, with a threat of six months' imprisonment for non-payment. Under Section 25 of the Payments and Settlements Systems Act, 2007, an eNACH bounce—when there are insufficient funds in a bank account for an auto-debit—is treated similarly to a cheque bounce. This offense carries heavy fines and can lead to imprisonment for up to two years.

This case serves as a strong reminder that loans are not free money. Failing to repay them can result in fines, property seizures, and long-lasting consequences. Defaulting on loans can severely affect your financial future, making it difficult to obtain new loans, find employment, or even secure basic documents like a passport.Always repay loans on time to avoid long-term financial and legal troubles.