4 clever tips for managing Axis Bank Home Loan EMIs during a covid outbreak

The covid pandemic has changed everyone’s lives globally, causing mental, emotional, health and financial damage in multiple ways. And amidst all this, even worse hit ones are those who were repaying their home loans because these usually involve a significant part of our monthly income. In covid times, adverse impacts on income resulted in lots of borrowers facing difficulty in repaying their Axis Bank Home Loan EMIs. For all such home loan borrowers, there are some ways to manage the EMIs instead of fearing a dead end. Remember, repeated failure to make repayment of your EMIs despite having earlier had a satisfactory Axis bank home loan eligibility can eventually lead to a possible loan default. Hence it’s better to manage it at your level through these clever tips:

Direct your rainy day fund’s money towards repaying the home loan EMIs 

Given the presence of an adequate emergency fund amounting to a minimum of six times your monthly recurring & mandatory expenses, including loan EMIs, rent, tuition fees of children, SIPs etc., is a crucial habit to deal with financial exigencies. The immense uncertainty surrounding life events like sudden job loss, disability or severe illness is what necessitates the requirement for this fund. The occurrence of any such unexpected financial exigency can impact the borrower’s repayment capacity, resulting in failure of payment of existing EMIs too. Possessing an adequate rainy day fund would certainly bail you out of such circumstances. Thus, consider utilizing your contingency fund towards making the repayment of the Axis bank home loan  EMIs would help to avoid attracting any late payment fees and even damage to your credit score too.

Go ahead with the redemption of relatively low yield investments. 

This is amongst the better and less tedious ways to repay home loan EMIs in times of struggle. When facing a financial crunch, identify the fixed-income investments having low yield, like fixed or recurring deposits, debt funds, PPF etc., which offer low returns and are also not tied to any crucial financial goals. This is because the returns on these fixed-income investments are generally lower than the long-term expected returns of other asset classes like equities. Moreover, the interest rate earned from such sub-optimal investments tends to be much lower in comparison to the interest rate charged as per your Axis Bank Home Loan Eligibility and even the low-priced loan options. Thus, the redemption of your such low-yielding fixed-income investments can help to bail out in circumstances wherein you are facing difficulty in repaying Axis bank home loan  EMIs, hence helping in averting home loan default chances.

Enquire with your existing home loan lender to elongate the tenure

Whether it an unexpected downfall in a monthly inflow of income or a sudden rise in existing home loan’s EMI due to rising interest rate regime, your existing Axis bank home loan eligibility would be impacted by changes in EMI and interest rate, and hence, can often put a strain on your finances, especially in difficult times like covid, which can lead to difficulty in repaying the existing home loan EMIs. So, to deal with such adverse circumstances, the home loan borrower can request the existing home loan lender to elongate the loan repayment tenure, as a longer tenure would reduce the Axis bank home loan EMI amount as well, which can be helpful for the borrower in repaying the lower EMI amount and hence avoid loan default. While it’s a fact that stretching the loan repayment tenure would result in a higher interest payout, borrowers can deal with it by trying to make a prepayment of the home loan whenever they tend to have surplus funds in future. 

Opt for a balance transfer to switch to another lender for a lower interest rate

Those who have been finding it difficult to make repayments of their home loan’s EMIs due to covid’s financial impact can go for this smart way of lowering their EMI burden by switching to another lender via a balance transfer. But, before selecting any lender, it’s imperative to always compare as many as possible, on multiple parameters such as comparison with Axis bank home loan eligibility criterion, repayment tenure, processing fee etc., and then balance transfer onto that lender who provides a better interest rate coupled with better loan service terms. This would also assist in pulling down your Axis bank home loan  EMI amount and hence enable you to pay the reduced EMIs. Remember that the new home loan lender would be considering your application/request as a fresh home loan application and thus, consequently, may levy some associated charges like administrative and processing fees. So, before finalizing, always ensure that the total overall saving in interest cost is substantial and outweighs the balance transfer costs if any.

Final words

More often than not, Axis bank home loan acts as a gateway for us to realize the dream of owning a home. And with the gradual increase in financial inclusion, rising credit access and digital loans post covid, many people have been able to take a home loan. And this entire journey involves so many steps, from deciding the location of the property to selecting the suitable lender. Availing home loans requires lots of decision points to strike the best deal for both the house property as well as a home loan. And at worse, facing rejection or difficulty in any of these steps can make you disheartened. That’s why it’s best to financially prepare before applying for a home loan.

Also, remember, despite the all-time low home loan rates that you can fetch as per your Axis bank home loan eligibility at present, the big-ticket size and repayment tenures stretching up to 20-30 years for home loans make it both prudent and imperative to understand as well as follow the above-mentioned tips to manage the loan EMI repayments smartly after getting the home loan approved. This way, you would be able to avoid defaulting on the home loan, which can at worst lead the lenders towards exercising their right to sell the property whenever the home loan borrower defaults.