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Ramalingam Kalirajan |11136 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 12, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - May 11, 2025

Sir, i have an outstanding home loan of 4.27 lakhs. But, my job prospects are unsure. I have a job offer of prob 25000/- month and another which pays 20000/-. I lost my job this month. I had it for the past two years. I have a short fall of 10000/- this month to pay this month's EMI. Pls advise what i can do for this month and close my home loan, as soon as possible.

Ans: I understand how stressful this can feel. You're being responsible by asking for advice early. That’s very good.

Let me help you with a clear, step-by-step action plan — both for this month’s EMI issue and to close your home loan early, without burden.

Immediate Steps for This Month's EMI Shortfall
You have a Rs.10,000 shortfall for this month's EMI.

First, don’t ignore the EMI due date.

Late EMI can impact your credit score.

It may lead to penalty or default mark.

Call or visit your bank and explain the situation openly.

Request a 1-month moratorium or rescheduling of EMI.

Some banks allow EMI holiday for 1–2 months.

You need to request it before missing payment.

If you have any fixed deposits, RD, or gold, you can use or pledge them.

Gold loan is fast, safe, and cheaper than personal loan.

Avoid credit card debt or personal loan at high interest.

Borrow from close family if possible, with clear repayment promise.

Keep receipts of any delayed EMI or late charge.

Job Offers: Pick with Long-Term Lens
You have two offers: Rs.25,000 and Rs.20,000.

Choose the one with more job security and stability.

If Rs.25,000 job is risky, then Rs.20,000 with more stability is better.

You can’t afford another break in income.

Ask the employer clearly about probation, confirmation, etc.

Monthly Budget Rework: Cut and Save
For now, cut all non-essential expenses.

Rent, groceries, loan EMI, and utility bills are priority.

Pause shopping, travel, and eating out.

This will help you save Rs.3000–Rs.5000 per month.

That money can go towards EMI or home loan closure.

Closing the Home Loan Early: Action Plan
Your loan balance: Rs.4.27 lakhs
You want to close it fast. That is a wise goal.

Let’s build a loan closure plan in 4 simple steps.

1. Emergency Buffer First
Keep at least Rs.20,000–Rs.30,000 cash or liquid fund as emergency.

This is for any gap in salary, medical need, or job delay.

Don’t use this money for loan closure now.

2. Choose EMI + Extra Payment Strategy
Continue regular EMI without delay.

On top of EMI, start small part-payments monthly or quarterly.

Even Rs.3,000 extra per month brings down interest fast.

No need for full pre-closure immediately.

Small consistent part-payments give same benefit over 1–2 years.

3. Any Bonuses or One-Time Inflows
If you get bonus, gift, or freelancing income, direct it fully to loan.

Don’t spend on purchases till loan is cleared.

Each Rs.10,000 prepayment will reduce interest and shorten loan term.

4. Track Loan Balance Every 3 Months
Visit bank or use online account.

Get latest principal balance.

After every extra payment, ensure it reflects as principal reduction.

Ask for revised amortisation schedule if needed.

Should You Use Investment or Insurance Money?
Let me clarify with care.

If you have any LIC endowment or ULIP policy, check surrender value.

These give very low return and poor insurance.

If they are investment-linked, not pure protection, consider surrendering.

Reinvest that amount wisely to grow or reduce home loan.

But don’t touch term insurance or health insurance.

They are protection tools, not savings.

Building Your Income Stability
You just lost your job, but you are actively taking offers. Well done.

Also explore freelancing, tuition, weekend work.

This can help close your Rs.10,000 monthly gap faster.

Talk to old colleagues or clients for referral work.

Mental Peace and Confidence
Financial stress can feel heavy. But your approach is strong.

You’re solving things early, without panic. That’s admirable.

Once you stabilise income for 3–4 months, increase loan prepayment.

Closing home loan early gives mental peace and better credit score.

That opens better financial doors in future.

Final Insights
Inform bank early about this month’s EMI issue.

Don’t delay communication or EMI. That’s very important.

Use gold loan or family support for this month, if needed.

Select stable job over higher salary.

Keep Rs.20,000–Rs.30,000 for emergency fund.

Start part-prepayments monthly or quarterly.

Track loan balance and shorten term over next 12–18 months.

Surrender poor-performing ULIP or LIC plans and redirect to loan.

Avoid high-cost personal loans or credit card EMI.

Stay emotionally strong and focused.

This difficult time will pass. Your discipline will help you come out stronger.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.