Managing EMI and SIP Payments During Financial Hardships!
Posted on: 10/Jul/2024 3:19:10 PM
Facing difficulties in continuing your Systematic Investment Plan (SIP) or home loan repayments? Financial emergencies, such as unexpected medical bills or job loss, can make it challenging to keep up with these commitments. However, there`s no need to panic or cease your investment plans or loan repayments altogether. Here are some effective strategies to manage your monthly expenses during tough times.
Home Loans
Missing one EMI payment won`t immediately make you a loan defaulter, but consecutive misses can lead to serious trouble. If you miss three consecutive payments, you`ll start receiving reminders from your bank, which, if ignored, will escalate to legal notices and potentially being tagged as a defaulter. To avoid this, communicate with your bank as soon as possible. Here are two options they might offer:
1. EMI Holiday:
Explain your situation and your temporary inability to make payments. The bank may grant you an EMI holiday or moratorium after assessing your case. Note that this usually comes with a penalty fee.
2. Reduced EMI:
Request the bank to lower your monthly installment. This will extend your loan tenure but make the monthly payments more manageable.
Systematic Investment Plans (SIPs)
If you`re considering canceling your SIP due to financial constraints, think about the hassle of starting it again from scratch. Instead, consider pausing your SIP. Most fund houses, including ICICI Prudential AMC, allow investors to pause their SIP once during the investment period, typically for one to three months. After this pause, you`ll need to resume regular payments.
To pause your SIP, follow these steps:
1. Offline Procedure:
Fill out a physical form and submit it to the Asset Management Company (AMC). Inform your bank to pause the mandate for debiting the SIP amount to avoid penalties for failed debits due to insufficient funds.
2. Stock Exchange Investments:
Note that this pause facility may not be available for SIPs made through the stock exchange.
By communicating with your bank and utilizing available options, you can manage your financial commitments more effectively during challenging times.
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