Tough times need innovative ideas along with informed and well thought of decisions. The Pandemic apart from causing massive loss of lives has also put many households in financially difficult state- unsustainable for some. Indian job loss figure is close to 13-14 crore. For those who have lost their jobs or earnings, it is important to take stock and realign their strategy.

It is normally advisable to take a Home loan for buying properties for various reasons. As a resultant, most buyers use this option as can be seen from the data; about Rs 13 lakh crore of housing loans was outstanding as on January 31, 2020. Of this, majority are salaried people. Sadly, many have lost their jobs since the scourge of Covid commenced. Its extremely important to save one’s Life and Livelihood -Jaan & Jahan. So, what are the Options? In such trying times, it is not the best option to liquidate the loaned properties, as it would generally result in 10-12% loss on your investments. Hence, this should be the last option. So what are the other options available?

  • If it is somehow possible to keep paying the EMI by enforcing cuts in other expenses, it is the best way out.
  • It is a normal guideline in Job as also Business, that one should have a year worth of reasonably liquid asset for unforeseen circumstances, ie Emergency Fund. However, it is not possible for some. Hence, the first step should be to go in for Home Loan EMI moratorium.
  • In most cases when one leaves a Job is issued a Pink Slip, a Severance amount is paid, which must be used to reduce the EMI burden by reducing the loan, or use it for the EMIs once moratorium is over and your situation improves and stabilizes.
  • Most of us have some type of savings- Debt Funds, RD, FD, ETF Gold, PPF, EPF, Equity etc. Except for equity – which would have been drubbed down due to the Pandemic; all other asset should be utilised. This is a “Rainy Day”, and these savings are meant for such times. There has been a notification wrt permission to do 75% withdrawal from EPFO.One can also consider selling some asstes like car etc, which could be spared. Its a No Brainer to say that the interest you get on FD, RD etc, are mostly lesser than the Interest on EMIs.
  • For equity investors, and investors in Insurance, one can borrow against one’s shares / Insurance.
  • Friends and family are tested during bad times. Try it out. It doesn’t need your financial scrutiny and mostly are interest free. Even if you don’t get help, at least you will get to know them.
  • Many of us have family Gold. With the bullion trading at all times high, this can be utilized for both ie selling / loan against security.

Like all Good times move on, so do bad times. It is extremely important to maintain one’s sanity and take decisions as suitable for you. For a particular individual, there may be some other ways also, so try and analyse your fund state and take a decision you feel is good for you.