Unlike our ancestors, who
worked hard for years to buy their home are open to the idea of purchasing
their property for home loans. There is no doubt about taking home loans due to
government policies. But at the same time, motivating oneself has made the
youth tense and fearful about the unexpected future. Out of all the loans a
person takes for a lifetime, the home loan is the most difficult to repay. A
normal home loan is taken for a period of 5 to 30 years. EMIs are easier to
manage when a home receives some rental income, but this is not the case with
self-used property.
Well, we have never seen
the future. But at least we can be ready to face it. In this writing, we have
shared some great tips to help you manage the payment of EMI during financial
stress.
1) Don't Overload Yourself - If you have
invested in multiple properties, and repaying a home loan is a difficult task
that makes you feel stressed, and then take action on time. Instead of living a
stressful life, you should consider getting rid of the burden. These days, you
can easily sell a property, even if it is under debt obligation. Alternatively,
you can rent it to a suitable tenant or real estate company. By renting
property or renting it to a person or business organization for a long period,
you can earn a regular income that can be used to pay off debt.
2) Speak to the bank at the right time - Whenever you feel inability to repay a home loan, do not hide the truth
from the bank by avoiding its message or call. Rather, you should be
transparent about your position to the bank. In general, banks try to support
their customers in adverse circumstances.
3) Maintain a contingency fund- To face the
effects of adversity such as job loss or economic downturn; you should maintain
expenses for about 6 months as a contingency fund. Due to low interest rates in
savings accounts, you can keep this money in fixed deposits.
4) Get insurance - Does not come
with a life guarantee card. In certain situations such as job loss, economic
downturn or death, loan installments may not be paid on time. Failure to pay a
home loan can lead to a situation when the house or its collateral will be
confiscated. To prevent such situations in unexpected future, you should get
home loan insurance.
5) Make quick payments - In some
situations, it can be difficult to repay the EMI of a home loan. But reducing
EMI payments every month will increase the outstanding principal amount. If
possible, try to make a quick repayment of the principal amount as it will
reduce the financial burden. Remember that repaying home loan should be your
priority over other expenses.
