The pandemic has put a serious blow on almost everyone’s career and income. While some have just faced a pay cut, many have lost their jobs during this period. Naturally, it could be a challenge to pay home loan EMIs after losing a job. However, there is no need to worry. Read further to learn some tips that can help you float through these difficult times and pay EMIs comfortably
- Talk to the lender
The first step you must do is to inform the lender about your situation. You must talk to them about your inability to pay the EMI due to the loss of your job. If you have been regular in EMI repayment until now, they could help you. The lender can restructure your loan to reduce your EMI and make it affordable for you, or they can also defer the EMI for a few months without penalty or additional home loan interest. Not informing the lender and continuing to default on repayments can only add to your problems.
- Utilise investments
You can use the money saved in investments like fixed deposits or recurring deposits. You can withdraw those investments that have not been tied to any financial goals. Using FD and RD could be a better step than defaulting on EMI payments because, usually, the interest charged on late payment of EMI is much higher than the interest income you earn through fixed and recurring deposits.
- Withdraw from the provident fund
Considering the economic slowdown in this pandemic, the Labour Ministry allowed the partial withdrawal of retirement savings like Provident Fund. According to the recent amendments, you can withdraw non-refundable co-vid advance from your PF credit account. You can withdraw 75% balance of the account, or three months’ worth of dearness allowance and basic salary, whichever is less. This amount could help you manage the EMI until you get employment.
- Liquidate assets
You can sell your assets like gold or silver or any other precious metals to arrange funds. Gold can also be pledged for funds if needed. Moreover, if you have invested in the money market or mutual funds, you can also liquidate them to pay the EMI. If you have none of these, you can try borrowing some funds from your family and friends.
- Take a loan against an insurance policy
You can avail a loan against your insurance policy. The interest rates of such loans are lower than other unsecured loans. The disbursement is quick as they already have your details.
Non-payment of EMI can attract penalties and make you a defaulter by law, creating more problems for you in the future. You must strive to pay the EMI, however possible, to avoid facing any inconvenience. Following these tips can help you avoid defaults and pay off EMI even when you have lost the job and are not receiving a steady flow of income.