While home loan fulfills people’s dream of getting their home, paying home loan EMI every month creates worry for people. In such a situation, if you are also unable to pay the home loan EMI, then you can pay your loan EMI with some of the tips mentioned here.
What happens if you default in paying the home loan EMI?
If a bank or housing finance company (HFC) has financed the purchase of your property, you have the means to recover your dues in one way or another in case you do not pay the loan. A home loan is a securitized loan, i.e. the lender owns your property until you repay the entire loan amount.
According to Adil Shetty, CEO, BankBazaar, if you miss your Equated Monthly Installments (EMIs) for three consecutive months, the lender has the right to first send you a reminder for payment. If you are still unable to clear your dues, the lender reserves the right to initiate the process of auctioning your property to recover your dues as permitted by the legal framework of the SARFAESI Act 2002.
Meanwhile, missing your EMIs and becoming a defaulter will also mean that your credit score will drop, making your future borrowings difficult. Therefore, instead of eliminating this crisis, you should think about ending it. For this reason, here are four options that can help you pay your home loan EMI.
Use Emergency Fund: Lack of income can be a hindrance in your home loan repayment. On the other hand, if you lose your job or you lose your other source of income, then you may have to face this problem. Hence, it is advisable to keep the money invested for emergencies, so that it can be useful in times of need. An emergency fund can help you pay EMIs and avoid default.
Loan Insurance: There are a variety of loan insurance plans in the market, which can cover your EMIs for a short period. That is, if you take a home loan, then you can also get it insured. On the other hand, you will find insurance useful in case of job loss, but you will need a solid way to pay off the debt.
By disposing of the property: If you have exhausted your income and savings and are unable to repay the loan, you can explore other options to raise some cash. You can repay the loan by settling things like gold, a car, electronics, PPF money etc. According to Gaurav Gupta, Founder and CEO, MyLoanCare, if you are facing a challenge in paying home loan EMIs and the EMIs are too high to pay, you can try to reduce your EMIs by making partial payments. can do.
Lender negotiation and resolution: You can contact the lender from whom you have taken the loan and let you know about your situation. Also, you can show him your track record, so that he can understand your problem. Depending on the lender, you can take more time from him or you can reduce the EMI by making the loan EMI for a longer period, which you can repay.