Home loans allow you to buy or construct your dream home easily. They allow the required quantum of finance needed to fund your own home. However, home loans have considerable EMIs that are needed to repay the loan and the repayment tenures are also long. When you are working, you get a regular salary every month and paying the loan EMIs is not a problem. What if you lose your job? In the absence of a regular salary, how can you manage to pay your home loan EMIs?
Paying home loan EMIs after the loss of your job is a difficult thing to do. However, it is not impossible. If you have lost your job and wondering how you can repay your home loan without facing a financial strain, here are some ways to do so –
- Re-fix your EMIs
Higher EMI payments become difficult in the absence of a regular salary. So, talk to your bank and get the EMI restructured. You can increase the loan tenure to reduce the EMIs payable per month so that they become affordable to repay until you get a new job.
- Renegotiate the loan
Talk to the lender to renegotiate the terms of the loan. Request the lender to offer you EMI holidays so that you can overcome your financial dilemma. In an EMI holiday, the EMIs are not payable for some months. This does not attract interest as the lender grants you the holiday. By availing EMI holiday the repayment burden would ease. You can, thereafter, resume repayment once you get another job.
- Check the insurance policy
Home loans usually come attached with an insurance policy which is aimed to clear off the outstanding loan amount in case of death of the borrower during the repayment tenure. In many insurance policies, there are provisions for loss of job too in which the insurance company pays the EMIs of the loan for a specified period of time. If the policy attached with your loan has this coverage feature, you can get some breathing space as you wouldn’t have to wonder about EMI payments for some time after you lose your job.
- Use your savings or emergency fund
Having an emergency fund is advised for rainy days. If you have created an emergency fund, use the fund to pay for the loan EMIs. If you haven’t created an emergency fund, use your savings account or investments for paying the loan EMIs.
- Prepay your loan to reduce the liability
When you lose your job you might get a severance package from your employer. Use the money you get to prepay your home loan. When you prepay the loan, the loan burden reduces. Thereafter, as you restructure the EMIs, paying the loan becomes easier even in the absence of a regular salary.
- Balance transfer
Home loan balance transfer can also be done if your current lender is not open to renegotiating the home loan terms to reduce the EMIs. You can transfer your home loan to another lender with a lower interest rate who also lets you fix new repayment tenure to reduce the EMIs so that you can pay the loan easily.
So, even after losing your job avoid default on your home loan through these ways. A