Losing a job is stressful, and it is harder when you already have debt such as a personal loan. Repaying while you have no income is tough, but it is usually temporary. The key is to act early and look at every option.
What you can do
Tell your lender early. Explain that you have lost your job and may struggle to pay. Many lenders prefer to work something out with a borrower rather than chase a default.
Read your loan terms. Check the clauses on late fees, missed payments and any grace period. If you bought a credit shield or loan protection cover with your loan, you may be covered for job loss.
Ask about restructuring. Some lenders in India offer restructuring, a longer tenure or a temporary break in payments for borrowers in hardship. Ask what is available and how to apply.
Consider selling investments. If you hold investments, selling some may be better than letting a loan with a high interest rate run into arrears. Weigh the tax and exit costs first.
Ask to defer an EMI. Lenders may agree to postpone an EMI for a month if you explain your situation. There is usually a cost for the delay, so ask what it is.
Look for assistance programmes. The government runs various schemes to help people in financial difficulty. Check whether any apply to you.
Protect your credit score
Missed EMIs are reported to credit bureaus and can lower your score. If you can pay even a part, tell the lender, and cover the minimum you can while you look for work. Avoid taking a new loan just to pay the old one.
Get advice
If it all feels like too much, speak to a financial advisor or a credit counselling organisation. They can help you plan repayments and negotiate with lenders. Above all, be open with your lender. Many understand the challenges borrowers face and will work with you.
