5 Things You Should Do If You Are Unable to Pay Home Loan EMIs on Time

Indian lenders are one of the most dynamic lenders you would find anywhere across the globe. Be it the transparency in terms and conditions or flexibility in tenure, easy enhancement in the loan amount, or ease of documentation, Indian lenders are no less than the category best. However, when borrowers do not pay their dues, almost all lenders across the world behave in the same way – they impose a penalty, or fine, or, in the worst case, confiscate the property.

This article gives you an idea about the five things you should do if you are unable to repay your home loan EMI on time.

Talk to the Lender and Request a Grace Period

Generally, a lender would not consider you as a defaulter if you are unable to pay the home loan EMI on a certain month. Only when you do not pay the EMI for six months will the bank initiate proceedings against you and might confiscate your property.

The first thing you should do when you skip paying the home loan EMI is to call or meet your lender and inform them about the issue. While the lender may impose a small penalty, they would not initiate legal proceedings immediately.

Increase the Tenure

If you think your floating rate of interest has increased suddenly, making it impossible for you to pay the home loan EMI, there is the provision to increase the tenure, which can lower your monthly outflow.

However, doing so can increase your interest rate. Hence, take this step only if you are sure about paying the EMIs throughout the extended tenure.

Increase the Tenure of home loan

Visit the Lender’s Counselling Centre

Almost all reputed lenders have their own counseling centers where borrowers may visit to get their financial issues resolved. For those who do not have such a facility, they would happily guide you to some well-recognized counseling center. 

Experts at a counseling center look at your financial history and find out the things you can do to avoid getting into a financial mess. Whether you need the advice or not is another matter, but there is no harm in taking a look at your finances again.

Transfer Your Loan 

Recent government regulations make it possible for you to switch between lenders. You may consider shifting your account to a different lender offering a better home loan interest rate.

Generally, any reputed housing finance institution offers interest rates as low as 8.95%. If you feel your existing interest rate is more than this, consider talking to other lenders.

Sell Your Existing Investments

The chances are high that if you have followed all of the steps mentioned above, you might not require coming to a point where you will need to follow this step. In case nothing else works, consider liquidating your fixed deposits or mutual fund units to pay the home loan EMI in part. 

If your existing investments are a little more than you require for EMIs, you can also clear off the principal, which would further bring down your home loan EMI. 


Although we rarely want to join the defaulter’s club, some situations are beyond our control. To avoid such a situation, you should create a contingency fund that can take care of your emergencies without any worry.

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