Anyone might become anxious at the possibility of losing their job and means of financial support, especially if they are suddenly laid off, just like the ongoing global layoffs by giant organizations like Meta, PepsiCo, Twitter, Amazon, Intel, Ford etc.
The abrupt loss of one’s normal source of income can make managing existing debt obligations extremely difficult. This is particularly true when it comes to housing loan EMIs, which probably make up the largest percentage of a person’s overall debt obligations when compared to other financial commitments like a vehicle or personal loans.
Therefore, if you, too, have lost your work income, the following practical solutions can be used to manage your monthly EMIs.
Requesting the lender to lengthen the loan’s term
Even if the home loan interest rate is fairly low, losing your job interrupts the flow of income into your household, making it virtually certainly impossible for you to continue paying the monthly payments on your current mortgage. If you haven’t included in your loan payments or EMIs in your emergency fund, you may run into some trouble. It is in your best interest to let your lender know the specifics of your present financial status and request a longer repayment period for the loan.
Lower EMIs will result from this, which you can check using an SBI Home Loan EMI Calculator. The EMI would be less each month if the loan were taken out for a longer duration. In situations where money is scarce, this would be helpful and could help the borrower avoid defaulting on the loan. To verify the EMI computation, you may also use an HDFC Home Loan EMI Calculator.
You should try to repay the loan if you have additional money in the future in order to reduce the overall interest cost. It’s vital to remember that extending the loan’s term will result in a larger total interest payment.
Utilize your emergency fund.
If you used the SBI Home Loan EMI Calculator and discovered that you still had a long tenure and an outstanding amount to pay, use your emergency fund as soon as possible if there are no other options.
Your ability to weather a financial storm, such as the loss of your job, depends on how well prepared you are. An emergency fund with six months’ worth of living expenses, including your home loan EMIs paid to one of the most cheap lenders in the form of a home loan interest rate, can be a lifeline in tough times. Until you find a new work, you should use the money from your rainy day fund to pay off your house loan EMIs. Even a one-day delay in payment can have a negative influence on your credit score and credit report. Make it a priority to replenish your emergency fund once your regular income resumes so that it will continue to be adequate not only for present emergencies but also for potential future ones as well. Also, use tools like the HDFC Home Loan EMI Calculator and SBI Home Loan EMI Calculator to determine how your EMI might change if you ask your lender to change the tenure of your loan.
asking for a grace period
If you are having problems making your monthly instalment payments, you have the choice of asking your lender for a grace period (EMIs). If you have a difficult financial condition as a result of losing your work, the lender may provide you with a grace period, which is a brief suspension of your loan repayments. In order to give the borrower time to obtain a new job and pursue rehabilitation, no EMI payments will be expected from them during this time frame. As soon as you find a new job and are able to pay your bills, you will be able to start making payments on your current mortgage again. The interest component may still be assessed during the pause, which can increase your EMI; therefore, the lender may use the HDFC Home Loan EMI Calculator to see how your EMI may vary after restarting the payment after some time.
Continue selling off investments that have a low rate of return.
Finding fixed-income assets that are not designated for any key financial goals is one of the first and most crucial steps home loan borrowers can take when they are having problems paying their EMIs due to a job loss.
They frequently, but not always, produce returns that are lower than those produced over the long term by other asset classes, such as equities. Additionally, when compared to the interest rate applied to home loans, the returns generated as interest from such investments often have a tendency to be significantly lower.
Redeeming such fixed-income investments can therefore help you escape situations in which you are unable to make significant house loan EMI repayments, and more critically, it can help you prevent a potential home loan default. This is due to the fact that you can escape situations in which you are struggling to pay back your hefty EMIs by using such redemptions. Don’t forget to use the SBI Home Loan EMI Calculator to determine how much of the outstanding loan balance remains over the course of the loan’s remaining term before selling your low-yield investments to pay your EMIs. As a result, you can budget how much of your investment portfolio to apply to the loan until your income returns to normal.
Change lenders if you can
Switching to a new mortgage lender and transferring your amount to that new lender is an excellent solution for homebuyers who are struggling to make their monthly instalment payments (EMIs) on their present mortgages. First, use the HDFC Home Loan EMI Calculator to assess the anticipated change in EMI. Then, before choosing a particular lender, it is wise to compare a number of candidates based on a range of factors, including the interest rates given, the length of time the loan may be taken out, any associated processing fees, and so on.