How to Pay Home Loan EMIs if you Lose your Job?

Are you servicing long tenure loans? If yes, then you have additional reasons to worry given the coronavirus pandemic. In addition to staying safe, you need to ensure that the EMIs are paid regularly. Here, we take a look at how you can go about paying home loan EMIs in case you lose your job. Read on to know more.

Ways to Pay your EMI if You Loose your Job

1. You can take advantage of moratorium period – First thing, you can do is avail moratorium offered by Reserve Bank of India. While you will need to pay the money later with interest, it won’t be categorised as ‘default’ in your credit history.
2. Use the money which you get as severance – In case, you lose your job the organization will be offering an amount which will be equal to the salary of your notice period. You can use this money to pay the EMIs and save yourself from paying the penalty which will be charged for each default as well as additional interest.
3. Make use of your Provident Fund – With the government allowing the withdrawal of 75% of the savings or up to three months’ basic salary and dearness allowance (DA) from the PF account, you can use that money to pay the EMIs. It will cover you until you find a new job. The fact that the money will be credited within three days makes it a good choice.
4. Borrow from family and friends – Another option that you have is to borrow from family and friends. Doing this can be beneficial as you won’t have to pay interest on the borrowed amount. You can return the money within a mentioned date.
5. Dig into your investments – You can also break your fixed deposits and recurring deposits. With lenders offering minimal interest on the deposits, you can withdraw and use the money to pay the dues. It will ensure that you need not pay a hefty interest for defaulting on your home loan EMI.
6. Avail a loan against your insurance policy – You can also avail a loan against the life insurance policy which you may have. When compared to a personal loan, the rate of interest on the loan against an insurance policy is much cheaper. Moreover, the insurance company will disburse the loan quickly as it already has your details.
7. Liquidate assets – To ensure that you don’t miss out on paying your EMIs, you can liquidate your debt instruments. With most banks offering gold loans, you could pledge gold and jewellery to arrange funds.

While these are uncertain times, having alternative ways to deal with any unforeseen circumstances comes in handy. Don’t panic and stay safe.

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