It may be WISE to keep paying your EMIs

It may be WISE to keep paying your EMIs1

While we laud the RBI gesture for giving a moratorium of 3 months in paying EMIs (for retail loan like home loan etc) in lieu of the corona pandemic which seems to be scary looks in eyes of job losses and salary cuts it may be WISE to keep paying your home loan EMIs for the after effect of the moratorium period is probably scarier and stressful

If 3-month moratorium in paying EMI is availed by the customer from the bank the bank will perhaps give 3 options to choose from: –

1.Onetime payment after 3-month period ends with the interest accrued. This will result in a fatter EMI than paying monthly.

2.Add the interest to the outstanding loan and increase EMI for remaining months. Bigger EMI month on month. The complete personal financial planning needs an overhaul

3.Keep the EMI unchanged but extend the loan tenure. The number of additional EMIs will depend on the age of loan.

Missing 2 instalments could extend your loan by 6-10 months or increase the EMI amount by 1.5 %

If financial leveraging is utilized for fulfilling a need or a desire it is better to keep paying of the debt per schedule else the outstanding amount keeps adding and you enter a vicious debt cycle.

Please share your query directly to the author and get expert advice free of charge.

Sanjeev Kathuria is an entrepreneur and accomplished expert in a variety of areas pertaining to Real Estate such as land buying, liasoning, marketing, sales, construction and development. His chief interests lie in strategic sales and marketing as well as business development. Over the last decade, he has sold inventory worth Rs. 13,000 crores. Sanjeev’s strong value system and his integrity and commitment to his customers has been appreciated by everybody he has worked with. His new initiative of delivering quality content about real estate has been lauded by numerous industrialists and industry leaders.

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1 Response
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