I had taken a home loan LIC Housing Finance last year for amount of Rs 39 lakh and starting paying EMI Rs 25,567 for part payment Rs 27 lakh during COVID year i had not applied for moratorium but paid all EMI as per my salary credit to me and I had paid the EMI with in the same month with penalties for 3 months July, August, September until salary are regularised and now manager is not willing to pay final amount of Rs 12 lakh to me again putting grace period of 3 months and in that case if my builder will cancel my agreement then I will lose my money. Please advise what to do and my flat is ready to occupy, but the final amount of money stopped by LIC and the 90 days period by the builder is going to get completed by this month end.

Firstly, you should ask your lender for a loan account statement such that you can assess and do a proper reconciliation to clarify the payments made and what is actually due. Meanwhile, you can negotiate the time to make your payments till you can sort the issue with the lender.

I had taken a home loan LIC Housing Finance last year for amount of Rs 39 lakh and starting paying EMI Rs 25,567 for part payment Rs 27 lakh during COVID year i had not applied for moratorium but paid all EMI as per my salary credit to me and I...

Ans: First, I appreciate your honesty in asking for help. Many hesitate during such tough times.

You’ve paid 14 EMIs regularly. That shows strong commitment. Now you are facing a temporary crisis.

This can happen to anyone. What matters is how you handle it now.

Let us look at the full situation from a 360-degree view and give you clear steps.

Immediate Actions You Must Take

Right now, your EMI is unpaid. Missing more payments will affect credit badly.

Take these steps without any delay:

Talk to Chola Mandalam immediately.
Don’t wait. Don’t ignore their calls.
Visit the nearest branch and speak to the loan manager.

Explain your situation clearly.
Carry documents or proofs showing financial stress – like job loss or business loss.

Ask for a restructure.
Request them to lower the EMI, extend loan term or give moratorium.
They may offer one-time settlement, but take it only if you can pay.

Avoid taking more loans to pay EMIs.
That will worsen the crisis.

Never give cheque bounce or default silently.
That invites legal action. Stay in touch with them.

Your honest approach can help you get some relief. Institutions respect genuine cases.

Options That May Be Offered by Chola Mandalam

Lenders have several options for borrowers in difficulty. Not all are declared openly.

You can request for any of the below, depending on your need:

EMI Moratorium:
A short break from payments (maybe 3–6 months).
Interest will still add up.

EMI Restructuring:
Your EMI is reduced and loan term is increased.
Total interest will be more, but EMI becomes affordable.

Temporary Interest-Only Payment:
You pay only interest for a few months. Then normal EMIs resume.
Used in genuine short-term problems.

One-Time Settlement:
If you can pay a lump sum, bank may accept lesser final amount.
But this harms your credit score. Use only if no other way.

Ask clearly and choose based on your affordability.

Assess Your Existing Financial Picture

Now let us check your finances from a full-angle view. Please consider these steps:

List all current loans.
If this is the only loan, pressure is less.
If there are other loans, then priority planning is needed.

List all income sources.
Salary, business, spouse income, rental, side work.
Even small income helps pay part of EMI.

List all expenses.
Remove non-essentials. Cancel or reduce subscriptions, luxury items.
Every rupee saved can go to EMI.

List your liquid assets.
Check if you have these:

Bank deposits

Emergency fund

Gold

Matured insurance

Any mutual funds or shares

Can you redeem any of these? Use only what is idle. Don’t disturb your full future planning.

If You Hold ULIP, Endowment or LIC Policies

You may have some insurance-cum-investment plans. If yes:

Check if surrender value is available.

Surrender and use that to clear EMIs or reduce loan.

Insurance returns are poor. Mutual funds are better long-term.

Use the money to settle or restructure your mortgage.

This will reduce pressure and bring peace.

Do Not Go for These Wrong Moves

Avoid these common mistakes. They seem helpful short term but are harmful:

Taking loan from credit card or personal loan – very high interest

Borrowing from friends or family without clarity – causes emotional stress

Selling good long-term investments in panic – check if loss is more

Ignoring bank notices – this will worsen legal action

Using apps or unregulated loan apps – dangerous harassment and high charges

Your solution must be safe, legal, and structured.

Can You Rent Out Part of Property?

If your mortgage property is a house, flat, or commercial space:

Check if part of it can be rented.

Even Rs.5000 to Rs.10000 monthly rent helps pay part of EMI.

You can also consider working from home if that reduces travel or office costs.

Explore Additional Income Sources

During crisis, every extra income counts. Try any of the below:

Tuition or online teaching

Part-time job or freelancing

Food or delivery services

Small resale or side business

Spouse’s contribution if possible

This may not solve full EMI but helps reduce stress.

Consider Selling the Property (Only if No Other Option)

If your income is gone for long term and loan is big, consider this:

Sell the mortgaged property, repay loan, and stay debt-free.

Use balance money for rent and basic needs.

Later, when finances improve, plan new asset creation.

Don’t see this as failure. It's wise decision-making. Mental peace is more important.

If Property is About to Go for Auction

If you get bank’s legal notice under SARFAESI Act:

Do not panic.

You still have 60 days to reply and stop auction.

Go to bank and give written application to settle or restructure.

Take legal help if needed.

Propose a buyer yourself, if you plan to sell.

Your cooperation helps the bank trust you and hold auction.

Impact on Credit Score and How to Handle It

If EMI default continues:

Your CIBIL score drops.

Future loans get difficult.

Co-applicant also suffers.

But with regular communication, settlement, or restructure – damage can be reduced.

After recovery, slowly rebuild credit by:

Paying small EMIs on time

Taking secured credit card

Using savings account-linked credit tools

Credit repair takes time. But can surely happen.

Avoid Investing Now Until You’re Stable

Even if someone suggests new investment to cover loss – please avoid now.

Don’t invest in:

Real estate

High return schemes

Stock tips or F&O

ULIPs or traditional insurance plans

Your current focus must be:

Stabilise cash flow

Repay debt safely

Secure basic family needs

Then plan long-term investments

When You Become Stable Again, Plan with Expert Help

Once this crisis is under control:

Build emergency fund again

Don’t over-borrow again

Invest in mutual funds through regular plans

Use a Certified Financial Planner to plan goals

You will come back stronger.

Finally

Talk to Chola Mandalam finance without delay

Request EMI pause, restructure or partial payment

Don’t ignore notices

Use only safe income and assets to repay

Avoid panic loans or investments

Sell property only if nothing else works

Rebuild slowly after stability

This phase is tough, but temporary. Stay strong and take calm steps.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment