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 your dilemma. In fact there is no law that says that you cannot live in a rented flat. Consider living in a rented flat for a while till your finances take shape.

The rent will be a fraction of the EMI that you will need to pay even for a smaller home. Consult a personal finance advisor if you need to do so.

Ans: Hello;

Is it possible for you to make a partial withdrawal from GPF?

If yes, then use it to repay the loan and reduce the EMI burden commensurately.

Never do investment with borrowed money, except for home meant for self use.

Worst case sell agricultural land or plot and use the proceeds to reduce outstanding loan and hence EMI outgo.

Best wishes;

Ans: You and your wife are already doing a good job by taking joint financial responsibility. Your EMI is currently manageable. The drop in repo rates gives a good window to restructure the strategy for early loan closure.

Let us now build a 360-degree strategy to help you close this home loan earlier than planned.

Present Financial Setup
Your home loan is Rs. 90 lakh.

Rs. 68.85 lakh is disbursed, and Rs. 21.15 lakh is yet to be released.

Your joint monthly income is Rs. 1.35 lakh.

EMI is Rs. 55,000 per month for now.

The interest rate has slightly reduced recently due to repo rate drop.

Your EMI burden has reduced a little, which helps.

Strategy 1: Prioritise Partial Prepayments
Any bonus, gift, or extra income can be used to prepay the loan.

Even a small prepayment once in 6 months reduces interest in the long run.

Prepay only from surplus, not from your emergency fund.

It helps to request the bank that all prepayments should reduce tenure, not EMI.

Strategy 2: Increase EMI Every Year
Every year, your income might rise slightly.

Use part of that rise to increase EMI voluntarily.

A 5% annual increase in EMI can save many years of tenure.

Even Rs. 2,000 more in EMI monthly can create strong impact.

Strategy 3: Build Prepayment Fund Separately
Open a recurring deposit or a debt mutual fund.

Deposit a fixed amount monthly.

Once in 12 or 18 months, withdraw and use for prepayment.

This is useful if you cannot prepay every month.

Strategy 4: Use Tax Refunds and Yearly Increments
Every year, you may get tax refund.

Instead of spending it, use it for loan prepayment.

Year-end salary increments should partly go towards EMI increase.

Avoid lifestyle inflation during raise in salary.

Strategy 5: Target Rs. 1 Lakh Prepayment Per Year
If both of you manage Rs. 50,000 each in a year, target is done.

Rs. 1 lakh annual prepayment cuts both tenure and total interest.

Consistency is more important than amount.

Strategy 6: Protect Emergency Fund
Maintain 6 to 9 months of expenses as emergency fund.

Do not touch this for prepayments.

It gives financial peace and avoids stress during job loss.

Strategy 7: Do Not Increase EMI Burden Too Much
Total EMI should not cross 40% of combined income.

Don’t stretch finances too tight for prepayment.

Balance is more important than aggression.

Strategy 8: Do Not Go for Higher Tenure Again
If interest rate drops, do not extend loan tenure again.

Ask bank to reduce EMI or keep EMI same but reduce tenure.

Tenure reduction saves maximum interest.

Strategy 9: Avoid Unnecessary Loans
Avoid buying car or electronics on EMI during this period.

More loans will delay your goal of early closure.

Strategy 10: Invest Only After Building Stability
Prepay loan first before going for long-term investments.

You can start SIPs and other goals once EMI is under control.

But keep PF, insurance, and child education savings intact.

Strategy 11: Avoid Interest Rate Shock in Future
If possible, shift to fixed rate after 3 to 5 years.

That will protect you from rate increase cycles.

Discuss with your bank when most of disbursal is done.

Strategy 12: Track and Stay Focused
Keep a simple Excel sheet to track balance and prepayments.

Visual tracking helps stay motivated.

Reward yourself after every prepayment milestone.

Finally
Early loan closure is fully possible with your current income level.

You and your wife are already doing well by maintaining a balance between EMI and lifestyle.

Using surplus income for prepayment, increasing EMI step by step, and avoiding unnecessary expenses can reduce your 30-year loan to 12-15 years.

Loan closure should be done with balance and planning, not stress or over-commitment.

You don’t need to be aggressive. You need to be consistent.

Focus on liquidity, stability, and controlled prepayments.

You are on the right path. Just stay focused and structured.

Once the home loan is cleared, your long-term wealth building journey will be very strong.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: You are going through a tough phase. But things can improve. You just need a clear action plan. Let us look at your situation in detail. Then we will take practical steps.

Your Current Financial Position

Home loan of Rs. 55 lakh. EMI is Rs. 62,000. Loan term is 12 years.

Personal loan of Rs. 8 lakh. EMI is Rs. 31,000. Term is 3 years.

Total EMI burden is Rs. 93,000 per month.

Your monthly income is Rs. 45,000.

Spouse income is Rs. 70,000 monthly.

Combined family income is Rs. 1.15 lakh monthly.

You are staying on rent due to transfer. That adds rental burden.

EMIs have been unpaid for 2 months. Bank may take recovery steps soon.

You want to save your house. That is your top priority.

This is a tight financial situation. But you still have income. That is a good base to begin from.

Evaluate Your Loan Priorities

Home loan is a long-term secured loan.

Personal loan is short-term and unsecured.

Defaulting on personal loan hits credit score faster.

Defaulting on home loan can lead to property loss.

Focus on protecting the home loan first.

Delay or reduce payment on personal loan if needed.

Talk to the personal loan bank first. Ask for restructuring.

Protect your home EMI as priority.

Personal loan EMI is hurting cash flow. You need urgent relief there.

Check Rental Decision Again

You are staying on rent due to job transfer.

Can you shift to company-provided accommodation?

Or shift to a cheaper house near workplace?

Try to save at least Rs. 10,000 from rent.

Every saved rupee must go to loan EMI now.

Keep rent below Rs. 15,000 if possible.

Take temporary discomfort to save the home.

This sacrifice is needed only for 2-3 years.

Review Your Household Spending

Write down all family expenses for last 3 months.

List every small and big item.

Look at groceries, travel, kids, entertainment, mobile bills.

Cut non-essentials fully.

Keep monthly expenses below Rs. 20,000.

Prepare and follow a strict monthly budget.

Cook at home. Avoid food delivery and dining out.

Use only basic internet and phone plans.

Postpone any buying decisions for 12 months.

Say no to lifestyle spends. Focus only on survival now.

Emergency Step: Loan Restructuring Request

Immediately visit your home loan bank branch.

Ask for restructuring under hardship clause.

Show income slips, EMI delays, transfer letter.

Request for temporary EMI reduction for 12 months.

Or ask for interest-only EMI for 6-12 months.

Bank will check your repayment history.

If accepted, this can give breathing space.

It will not affect your credit as badly as default.

Do not wait for legal notice. Act before that.

Emergency Step: Personal Loan Moratorium or Part Payment

Call your personal loan bank urgently.

Explain current hardship.

Ask for 3-month moratorium. Or lower EMI for 6 months.

Request for partial payment option.

Ask if tenure can be extended by 1 year.

Use the money saved to pay home loan.

Personal loan flexibility is easier than home loan.

Discuss With Your Employer

Ask for salary advance for 2 months.

Or request for temporary housing support.

Ask if your rent can be reimbursed for 6 months.

Explore short-term financial help from company.

HR may help if explained honestly.

Use Any Existing Savings to Cover EMI Gaps

Do you have any FDs, RDs, gold, or mutual funds?

Do not hesitate to liquidate now.

You can rebuild later. House comes first.

Sell non-essential jewellery. Use it to clear 2-3 months EMI.

Do not redeem children’s education savings yet.

Prioritise housing goal right now.

Use Emergency Funds Wisely

If you have any cash at home, use it for EMI.

Do not use credit card to pay EMI.

That will create another high-interest loan trap.

Avoid borrowing from apps or informal lenders.

Keep things simple and direct.

Ask Family or Trusted Friends for Help

If any sibling or parent can help, request support.

Ask only what you can repay in 6-12 months.

Be transparent about usage. Use only for EMI payments.

Give a plan to repay. Stick to it with discipline.

Cut Back SIPs or Any Investments Temporarily

Stop all SIPs till loan EMIs stabilise.

Use that amount to reduce loan backlog.

Once income improves, restart SIPs.

Do not start new investments now.

Survival and protection of house are the only goals for now.

If Any LIC, ULIP or Investment-Linked Policy Exists

If you have any such insurance policy,

Check surrender value. Use it only if no other source.

ULIPs give poor returns and have high charges.

Better to surrender and pay EMIs.

Later, invest in mutual funds via SIP.

Do not rely on investment-cum-insurance products.

Rework Loan Strategy Once Stability Returns

After 3-6 months of steady income,

Start a separate fund to prepay personal loan.

Try to close personal loan in 2 years.

Once personal loan is over, use that EMI to prepay home loan.

Even Rs. 5,000 extra per month reduces loan burden over time.

Home EMI must not run for full 12 years.

Try to finish it in 9-10 years max.

Talk to a Certified Financial Planner After 6 Months

Once things are stable,

Do a complete financial health check-up.

Fix goals, insurance, investments in alignment.

Make a step-up plan for wealth and safety.

Do not do DIY or take online advice without support.

A Certified Financial Planner will guide you rightly.

Review Job Options or Side Income

Can you or your spouse take up part-time income?

Tuition, consulting, freelance work, weekend sales?

Try to increase income by Rs. 10,000 per month.

Every extra rupee must go to loan closure now.

Avoid These Mistakes Now

Do not ignore bank calls or letters.

Do not apply for another personal loan.

Do not swipe credit card to pay loan EMI.

Do not invest in stock market or crypto now.

Do not take loan from unregistered apps.

Do not delay action. Act within next 7 days.

Finally

You still have a house. You still have income.

That is your strength. Use it wisely.

Take hard steps for 1-2 years. Your home will be safe.

No shame in asking for help. But be clear in purpose.

This phase will pass. Keep patience and discipline.

Don’t give up or ignore the situation.

With planning, sacrifice and support, you will succeed.

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