Not Able To Pay EMIs? Here Are Your Options

All our life's decisions are based on assumptions of normal times ahead. However, we can hardly know what future holds for us. If things go haywire, we might find ourselves in a fix. The problem would seem more gargantuan if the problem is monetary in nature. In case of a personal tragedy, we can grieve in the privacy of our personal space. However, in a scenario where others are involved and the nature of their involvement is financial, this will invariably go public. It is in this context we should look at your choices in case owing to some personal issues you are not able to pay you home loan EMIs (equated monthly installments) .

Here is what not to do if you are on the verge of a money trouble and may not be able to pay your EMI in the times to come:

Don't avoid their calls

Those regular calls, messages and emails would look pesky and remind you of the time when the bank thought you were its esteemed customers. Let these thoughts not carry you away. The truth is that loans are a liability, and you are legally bound to pay it off — be mindful of the fact that you can also be punished with a jail term in case of willful defaults.  Respond to the bank's calls and messages in place of avoiding them.  Remember at all times that communication is the only key to solving the problem.

Also read: What Is The Ideal EMI To Rent Ratio?

Don't hide facts from them

It may also not be a good idea to share only half of the truth. Suppose it is owing to loss of your job that you are not going to be able to pay your EMIs and you do not see finding a job anytime soon because the market is bad, do tell the bank that such is the case. Assuring the bank that you will start paying regular EMI after, say, three months, might not be a good idea. The more forthcoming you are with the bank, the higher the chances of averting bad blood.

Keep them in the loop from the start

Also, do not wait until the last minute for a divine intervention to solve your problems. You may have some savings that can act as a cushion during hard times but they would last only some months. This is why it is advisable to keep the bank in the loop right from the start of an issue. This will act as a proof that you do have a genuine problem and are not trying to default willfully.  Support all your claims with documents to further testify the truth.

Also read: How Does Paying An Extra EMI In A Year Help You?

What are your choices?

As soon as a monetary hardship strikes, your first thoughts would be that the bank would take possession of your property, auction it in the market and recover its dues. However, that happens only in the worst-case scenario, and only as the last resort.  If you tread carefully, such a situation might never arise.

You can talk to the bank and ask it to give you an EMI holiday. After this period, you could start paying an increased amount as your EMIs to pay off the obligation. Banks would readily agree to provide you this facility if you have a genuine problem and your payment record has been impeccable.  

You could also get your home loan restructured. This could mean smaller outgo of the EMI and stretching of the loan tenure. This is an effective way to deal with a pressing financial problem looking over your present.

If the crisis is too deep and you do not see any improvement in your financial status in future, you could also go for a one-time settlement. In this process, a bank takes from a borrower a lump-sum amount and settles the case. But, for this to happen, you will have to negotiate with the bank and convinced them. Second, if you succeed in convincing the bank and do settle the loan, it would get reflected in your credit report. This means you might find it hard to take another loan in future.