Outlook Money
EMIs for home loans can get difficult when the income is hit. it can be because of a job loss or a cut in salary.
A minimal grace period without a penalty is given if EMI is missed, but if there is a longer delay, then charges may apply on late payments.
If the default in EMI remains for more than three months, then the loan is declared as a NPA. This my be followed by banks sending legal notices or even taking possession of properties.
Before the situations get worse, banks should be considered for granting moratorium for a couple of months when EMIs re not needed to be paid.
One can even ask for a reduction in EMIs for some time and ask to pay more in future and extend the loan period so that the EMIs are reduced.
While taking a loan, there are certain people who seek home loan protection plan. These plans cover EMIs for sometime in case a job is lost or one falls ill or dies.
If one has a fixed deposit or an emergency fund, then it can be used at a time when there is income inconsistency. This can help maintain regular EMIs.
It is important to discuss the situation with the bank and manage savings, which can help in such situations.