Most people require financial assistance while buying a house. Not everyone has the savings to entirely fund a property purchase, which is why they rely on home loans to get the required finances. Most lenders provide a tenure of 20 years to borrowers for repaying the loan in monthly instalments. Now, it is possible for a borrower to start facing challenges in paying the EMIs. They might have lost their job or faced a medical emergency that has depleted their funds. Now, in such cases, it is possible to have missed an EMI payment towards their home loan.
Now, what happens in this case is that the interest will keep getting added to the outstanding balance of your loan. This means that the loan is costing more in the long run. But unnecessarily panicking will do no good. Take a look at a few ways that can help in getting your EMI payments back on track:
- Get in touch with your lender
In such times, it is natural for any borrower to get stressed out. However, panicking under the situation is not going to help the cause. Not doing anything about the missed payment can only complicate things further, which is why you should immediately get in touch with your lender and explain the missed EMI payment. Once the lender understands your problem, they will try and offer ways in which the problem can be solved.
- Inquire about a brief moratorium
There are cases where lenders understand the borrower’s troubles and offer a brief moratorium period. This period refers to a temporary pause from the EMI payments. Once you get back on your feet, you can begin the home loan EMI payments. The tenure of this moratorium period can differ from lender to lender.
- Refinance your home loan
This is a common solution for those who are finding it difficult to pay off their home loan’s monthly instalments. Your lender can refinance your home loan by increasing the tenure of repayment. With an increased repayment tenure, your EMIs would be of lesser amounts, thus becoming more affordable. You can make use of a home loan calculator to understand the revised monthly instalments.
- Set a budget
If you have missed out on a payment, one important thing to do is to revisit your budget, as there need to be certain changes to make sure that future EMI payments can be made on time. You can start off by understanding your exact outgoing expenses and making budget cuts. This can help in freeing up funds for the EMI payments.
- Maintain an emergency fund
It is advisable to start maintaining an emergency fund to rely on before you apply for home loan. However, it is better to be late than to never do it at all. This is because life is uncertain, and if there is ever a time of financial difficulty, you will have a cash reserve to fall back on. The amount in this emergency fund would depend on your home loan eligibility. If you are planning on applying for a high loan amount, it is better to keep a higher emergency fund as the loan’s EMIs would be higher too.
It is better to take missed payments on EMIs seriously and take action rather than ignore it. Dealing with the repayment issues in an effective way can help in protecting your CIBIL record and avoid legal complications.