* Emergency Funds
Building emergency funds can serve as a safety net during unforeseen circumstances, ensuring liquidity for timely EMI payments. Having an emergency funds of 6-12 months of your monthly income can help you overcome temporary financial stress. It will not immediately affect your loan repayments and you can work on other alternatives to repay your loan.
* Make Use of Savings
For temporary liquidity issues, borrowing from acquaintances or utilising FDs and other savings can help. Additionally, liquidating low-interest investments or considering withdrawals from long-term funds like PPF can aid in timely repayments. In more difficult financial situations where repayment seems unfeasible, considering downsizing homes or liquidating assets could be a viable option to avoid defaults.
Understanding the consequences of delaying home loan EMIs is crucial for borrowers. It’s not just about financial penalties; it’s about protecting your creditworthiness, financial stability, and future borrowing capacity. Proactive steps involve creating emergency funds, evaluating loan tenure, opting for moratorium periods, and maintaining communication with lenders to explore solutions like restructuring may provide some relief. However, planning and prudent borrowing based on repayment capacity are crucial to prevent EMI defaults.