Facing difficulty in home loan EMIs payment? Best tips to bail you out

Over the past so many decades, home loans have been the bridge that turns our dream of owning a home of your own into reality by providing the majority of funding, barring the down payment. When compared to other life goals like purchasing a vehicle or accumulating corpus for your child’s higher education/marriage and your own retirement, having a home you can call your own is probably the biggest and prioritized life goal for most. And when you get your loan approved at a low Bajaj finance home loan interest rate and begin repaying it through the long tenures, at times, you may face difficulty in EMI repayment due to financial issues.

As repeated failure to make repayment of your Bajaj Finance Home Loan EMIs can eventually lead to a possible loan default, adopting these steps can bail you out of such scenarios and help in paying the EMIs.

Utilize your emergency fund for paying the home loan EMIs 

Having an adequate emergency fund amounting to a minimum of six to nine times your monthly recurring and mandatory expenses, including loan EMIs, rent, tuition fees of children, SIPs etc., is a crucial habit to deal with financial exigencies. The high degree of uncertainty surrounding life events like sudden job loss, disability or severe illness is what necessitates the requirement for this fund.

The occurrence of any such unexpected financial exigency can impact the borrower's repayment capacity, resulting in failure of payment of existing EMIs too. Possessing an adequate rainy day fund would certainly bail you out of such circumstances. Thus, consider utilizing your contingency fund towards making the repayment of the Bajaj finance home loan EMIs would help to avoid attracting any late payment fees and even damage to your credit score too.

Go for the redemption of low yield investments not linked to crucial life goals.

Amongst the first ways to bail yourself out in financial crunches is by identifying their fixed-income investments having low yield, like recurring deposits, debt funds or fixed which are not tied to any vital financial goals. This is because the returns earned by these fixed-income investments are generally lower than the long-term expected returns of other asset classes like equities.

Moreover, the interest rate earned from such sub-optimal investments tends to be much lower in comparison to the interest rate charged on Bajaj Finance Home Loan Interest Rate and even the low-priced loan options. Thus, the redemption of your such low-yielding fixed-income investments can help to bail out in circumstances wherein you are facing difficulty in repaying Bajaj finance home loan EMIs, therefore assisting in the prevention of loan default chances.

Check with your existing home loan lender to increase the repayment tenure.

Not one but multiple reasons like an unexpected dip in the monthly inflow of income or a sudden rise in existing home loan's EMI due to rising interest rate regime, which consequently would likely result in a rise in Bajaj finance home loan interest rate too, can often put a strain on a borrower's financial life, hence leading to difficulty in repaying the existing home loan and other EMIs.

To tackle such scenarios, the borrower can request the home loan lender to extend the loan repayment tenure, as a longer tenure would pull down the Bajaj finance home loan EMI amount too, which can be helpful for the borrower in repaying the reduced EMI amount and thereby avoiding possible loan default. While it's a fact that stretching the loan repayment tenure would result in a higher interest payout, borrowers can deal with it by trying to make a prepayment of the home loan whenever they tend to have surplus funds in future. 

Opt for a balance transfer to switch to another lender for a lower interest rate

Home loan borrowers are finding it difficult to make repayments of their existing home loan's EMIs. A smart way to lower their EMI burden is by switching to another lender via a balance transfer facility. However, before zeroing in on any particular lender, it's prudent to compare them on various parameters such as comparison with Bajaj finance home loan interest rate, repayment tenure, processing fee etc., and then balance transfer onto that lender who provides a better interest rate coupled with better loan service terms.

This would also assist in pulling down your Bajaj finance home loan EMI amount and hence enable you to pay the reduced EMIs. Remember that the new home loan lender would be considering your application/request as a fresh home loan application and thus, consequently, may levy some associated charges like administrative and processing fees. So, before finalizing, always ensure that the total overall saving in interest cost is substantial and outweighs the balance transfer costs if any.

Final words to sum it up

More often than not,  Bajaj finance home loan acts as a gateway in our lives to fulfil our dream to own a home. And with the gradual emergence of increased access to loans, many people tend to end up simultaneously servicing multiple loans, including home loans, home loans, car loans, etc., either at the same or different time periods of their work-life years.

From deciding the location of the property to zeroing in on a suitable lender, the journey towards availing of home loans requires practicing due diligence at various decision points in order to strike the right deal for both property and home loan. And a rejection or difficulty faced in any of these steps can take you a step backwards in the journey of owning a home.

Moreover, with many home loan lenders putting out offers for various types of customer-centric EMI repayment options, tailor-made to suit varying loan repayment requirements of different borrowers, those serving a form of EMI repayment not suitable for them might be amongst borrowers facing difficulty in its repayment.

Simply put, despite the nearly all-time low Bajaj finance home loan interest rate at present, the big-ticket size and repayment tenures stretching up to 30 years for home loans make it imperative to understand and follow the above-mentioned tips to manage the EMI repayments smartly and avoid defaulting on it, which can at worse lead the lenders towards exercising their right to sell the property whenever the home loan borrower defaults.