4 tips to find your way out if you defaulted on your home loan

All is not lost if you are late on your home loan payments. Unforeseen circumstances like death of the individual, sudden illness, accidents, financial loss may be the reasons why you have been unable to pay your home loan instalments for a long time. Afraid you will be branded as a criminal? Don’t be. There is a way out

Talk to your bank: No, they will not catch you and throw you in jail in the first instance and or will your property be seized. Just don’t act like a criminal by avoiding their calls or intimations. Keep them in the loop. Approach your bank manager or loan official and provide sufficient proof of your intentions of paying the loan. In this case, you could submit documents supporting how you have been a loyal customer previously and had been paying your dues regularly and then explain your reason for not paying the loan. If the bank is convinced, the bank assist you.

Get a reprieve: Again this move also depends on the kind of relationship you share with your bank. If you are anticipating a loss in revenue or inability to pay the next few EMIs in the year, you could ask your bank for a temporary reprieve. Guarantee them that you will come into money at the end of the grace period you are asking. If possible have documents to support your claim. The bank can then grant you a temporary reprieve but again this will come at a cost for missing the related payments.

Opt for restructuring: When you finding yourself unable to keep with the home loan repayments, one measure an individual should consider is to opt for restructuring the loan. Yes, you can do it. It is one of your rights as a loan payer. If the quantum of payments is what is bothering you and financial loss is making it even more difficult for you to consider the EMIs, then the bank may look at a way of easing this out for you like lessening your payable amounts, spreading it out so that you can conveniently pay it in the future. However, it will come at a cost, the amount payable will increase, but it will certainly be better than giving up your home as a result of this.

Turn to your investments: Yes, if all the above methods fail, then assuming you would have made some prudent investment decisions previously, this could be your saviour. This is the best way to free up cash. You can choose to liquidate your investments and convert assets to cash for spending and reallocate it to paying off a chunk of your home loan EMIs. So then at least you have a temporary solution to your loan defaulting.

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