Why you must Buffer your Home Loan EMIs for Tough Months?

Author : Nidhi Kohli | Published On : 20 Apr 2021

Every day will not be the same. There will be various changes and alterations that happen. You will have an easy month and a tough one. You need to handle the tough situation that can come up anytime. It is noticed only when you have a financial crisis and your needs are not met. If you are having an ongoing home loan, you know how much you owe and for how long. A home loan is a big amount of debt in the market and you need to carry it on for more than 15 to 30 years. 30 years is a long time and a lot of changes may come up. You may face any emergency that does not permit you to pay your EMI or debt. However, missing an EMI will affect your credit score and it will not draw any positive impact on your financial health. There are certain ways by which you need to buffer your home loan EMI for the tough period.

Many expenses come up like:

  • When you are buying a house, you will go through various other expenses, besides your home loan EMIs. The other expenses can be the stamp duty, home registration charges, shifting costs, interior and society maintenance bills and brokerage fees are some of the standard costs incurred while you apply for a home loan. These expenses have to be met by you, and you cannot take debt for this. A home loan will be applicable for the property and not these petty issues.
  • In the case of possession of the property gets delayed, and then you have a lot of added burden of your home rent plus the home loan EMIs. This delay can actually last much longer than your premium holiday your loan provider actually gives you. So, it is better that you will need a provision to get smooth with both the rent and your home loan EMI.
  • Just like a pandemic that had hit hard, you may face job loss and salary deduction. How would you take this forward? You need to make sure that you are having a good amount of savings, as your loan provider will not hear issues that are of no importance. You need to stock at least an EMI of three months in savings.
  • There will be some months in a particular year that your expenses increase and they are at a peak. Like a month may have a few occasions that will give you some extra expenses. How will you handle the expenses in those months? Such months need to be adjusted as they will have a lot of extra expenses. It helps to have some money on the side to cope with the increased outflow. Make sure you are keeping your EMI on track and you are spending knowingly.
  • If an unfortunate situation comes up, like an illness or an accident, you will face some real crisis. You need to handle your expenses that will not be the same but will be extra. Make sure that you are handling your expenses in the right way and getting on track with the expenses that come up suddenly.

Wrapping up

You need to buffer some amount of savings to pay off your home loan EMI even at the time of crisis. It helps you to deal with the tough months and there will be no issues to handle. Use a home loan calculator to get the best home loan interest rate.