Buying a house is always a dream for any buyer. So when you buy a property on home loan, you must keep many things in mind whether you will be able to repay it or not. Sometimes, repaying home loan becomes a difficult obligation if one fails to pay regular EMI. This may happen as certain circumstances are beyond one’s control, such as loss of job, temporary extra expenditure or prolonged illness which may lead to financial crisis. But banks do not understand these problems as they were told to go through their own policy process.
Even the government of India these days has strengthened the laws governing non-performing assets (NPAs), by giving more power to the financial institutions, to recover the NPAs. And the worst part which is affected if you become a defaulter is your credit score. This will make difficult to avail loans in the future. Even a legal notice is sent to the defaulter if one misses two EMIs continuously.
So, before you fall into such legal and painful consequences, immediately take some simple steps to overcome such financial glitches and manage the loan EMIs:
The first important thing to keep in mind is to inform your lender about the situation. Obviously, they would abstain you from taking any extreme action, but would definitely help you to find a way out.
Consult financial advisers or credit bureau, as they can guide you in maintaining a good credit score as well as ways to sort your debts.
Refinancing your home loan is also a better option. There are chances that other banks may get a full year pause for your EMI. Though this will result in you paying more but it is always better than losing possession of the property.
Another option is to liquidate your existing investments such as mutual funds, fixed deposits to pay your EMIs. You can also use this amount to make part payment for the loan which will reduce the EMI going forward.
While a new option which is also available in the market these days is to take an insurance against the home loan. In harsh times, this option helps in paying up to three EMIs of the loan.
So it’s important to always check and manage your finances accordingly so that you can save yourselves from falling into such non-favoured situation.