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Is cash crunch affecting your monthly SIP, home loan payments? Here's help

You need not cancel your investments or hide from your repayments in case of cash crunch.

Priya Kapoor | October 6, 2017 | Updated 15:34 IST
Is cash crunch affecting your monthly SIP, home loan payments? Here's help

Are you finding it difficult to continue with your Systematic Investment Plan (SIP) or making home loan repayments every month? This could be because you just have settled a large medical emergency in the family, grappling with a job loss or any unavoidable situations which are forcing you to rethink about continuing your investments or making you worry about settling the liabilities that you have taken over. If this rings a bell with you, we must tell you that there is absolutely no need to fret over it and cancel your investments or hide from your repayments. Here's how you can deal with two main monthly expenses, which find a place in almost everyone's portfolio:

Home Loans:

Though you do not become a loan defaulter if you skip one EMI, three consecutive skips can spell trouble in your paradise. Upon three successive skips, bank will send you reminders. If you do not respond to them, a legal notice may be sent you. If you still remain silent, you will be dubbed a loan defaulter.  So don't remain silent. Speak to your bank. Your bank might be ready to sort out the issue before proceeding to take over your asset. It can give you two options:

EMI holiday: Tell your bank about your inability to temporarily make payment, it can grant you a holiday or moratorium on EMI after assessing your case. However, it might result in a penalty by bank

Reduce your EMI: If your situation is little better, you can make the request for reducing your monthly outgo by a certain amount. In that case, banks might increase your loan tenure.

In times of a tight situation, you might think to cancel the existing SIP. But think about the time that you will be wasting when you start it all over again. From registering with the fund house to giving mandate to your bank and the 15 day waiting for your mutual fund to start the SIP. You can avoid the hassle by simply opting for a pause facility. Most fund houses including ICICI Prudential AMC allows its investors to pause an SIP only once during the entire tenure of the investment. The duration of pause can range from one to three months.  After the pause period gets over, your SIP will continue normally.

However, the entire process is to be done offline. As an investor, you need to fill up a physical form and submit the same to the AMC. You also need to inform the bank to pause the mandate given by you earlier for debiting the amount and transferring to the mutual fund. Else bank may charge a penalty if a debit request from the AMC cannot be honoured due to lack of funds in your account. However, this facility is not available if investment had been made through the stock exchange as these SIPs are registered directly with the latter.


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