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It becomes very difficult to repay personal loan after job loss. However, with proper planning and, therefore, a clear notion of the options you have at your disposal, it will be possible to control your debts.
In this article, we shall discuss ways you can observe to make sure you do not default on your loan despite being jobless. Here is our 9-step financial-comeback strategy that can majorly help repay loan after job loss:
The first thing one has to do when he/she wants to repay loan after job loss is to take a financial check-up. This includes a carryout analysis of your current and past savings, the amount of money you spend monthly as well as any other sources of income that can be tapped for the purpose.
Your financial situation always helps to decide what part of the income is to be given for the loan repayments without neglecting the necessities of life. Begin by identifying needs and wants in the expenditures that you make, as this will help in categorizing the two accordingly. Fixed expenses are rent or Mortgage, utility bills, food, and insurance.
Contacting your lender at an early stage will help you know of the available measures that may assist you in doing some things concerning your loan. If you are calling your lender, do not hide the fact that you lost your job and what your current financial position is.
Share with them any additional facts, for example, what measures are being taken to obtain a new job and your adjusted budget. Some of the lenders have options of forging a temporary solution that may be in the form of a moratorium period, where you are allowed to either postpone or even halve the monthly instalments for a particular period. This can be very useful when one has to go in search of another job to repay loan after job loss.
Reflecting on the country of the user, there can be government aid services, which are aimed at people who have become unemployed. These programs can help supply funds that may help repay loan after job loss. One must do his or her homework on these options and make sure to avail what is entitled to him or her.
Government aid refers to finances provided by the government under certain conditions, and unemployment benefits are one of the most readily encountered types. At times, these benefits can help you get a source of income when out of work in the course of searching for a new job.
The money that is available from unemployment benefits could be used to pay the debts to the loan that is in existence, thus avoiding defaulting on the loans. It is strongly recommended that you apply for these benefits as soon as you become unemployed to get funds immediately.
You may also read this: Unemployed Loan Options in India
If you still aren’t able to repay loan after job loss, then you should discuss the possibility of renegotiating your loan. Debt refinancing conditions focus on changing one or more provisions of your loan agreement to repay. This can be a good solution if your financial situation can hardly be regarded as favourable shortly.
There are options of lengthening the repayment period, which is termed as restructuring. The best repayment way is to make it longer so that the payments you will be required to make monthly will be smaller even on low income.
However, what should be appreciated is the fact that such conditions imply that the total interest cost is going to be higher if the loan is spread out over a longer period. Hence, there is a need to consider the advantages of the strategy alongside the drawbacks before deciding to go for this option.
Most insurance policies contain clauses to enable policyholders to make claims in the instance of loss of job, this is the time to exploit them. They can assist in giving you the financial backup that we can use to repay loan after job loss or minimise the financial burden on you shortly.
These categories of insurance are such as loan protection insurance, which is suitable for instances like job loss. This kind of insurance, if your loan is paid under this policy, pays off your loan balance for some time as you look for a way to stabilise. Read the terms of your loan protection policy, and that lets you discover how you can make claims and the extent of the coverage you are given. This means that doing something in the present can prevent the occurrence of future negative outcomes such as missed payments and penalties.
If after you get jobless you are finding it hard to balance your finances, it might be wise that you consult a financial advisor. You should talk to a financial consultant so that s/he assists in designing a means through which expenses can be controlled or delayed. He can also help plan how to repay loan after job loss.
A debt counsellor can help you draw up a budget to repay your debts, discuss with your lender and get better conditions for the repayment of the debts and many other options. I found great benefit in this professional assistance in order not to be mistaken and make the right decisions in the choice of my financial future.
However, what a financial advisor can provide is more general help with budgeting apart from debt counselling. They can assist you in drawing up a financial plan that reflects your lowered income and allows you to repay loan after job loss as well as other basic living expenses. Having a well-conceived strategy, one can successfully manage themselves through this trying time.
You may also read this: Effective Ways to Get Rid of Debt
When looking for a new job, it is sensible to look for extra sources of income that could cover your loan instalments. Again, even if one is forced to take a low-paying and perhaps a temporary or part-time job, then at least it is something to help in easing the pressure. You can pursue part-time jobs to repay loan after job loss.
Freelancing is one possibility when a person has marketable skills. No matter if it is about writing, graphic design, programming, or consulting, freelancing allows working as a freelancer based on your schedule.
Self-employment also provides numerous opportunities for making a living. The jobs include driving people for Uber or Lyft, and delivering food for companies such as Doordash or UberEats; they all are offering income instantly with no fixed working hours.
Also, you can try and sell services, for, example, tutoring, pet sitting, and other virtual services. These gigs can be particularly helpful if you require additional cash while not being in a position to take on a full-time job.
Many times, especially during moments of financial volatility, one may end up borrowing more to repay loan after job loss. But this drags people into a cycle of loans that cannot be easily repaid. Learn to control your current debts, and if at all you have to take some more, consider it very carefully.
Maintaining discipline ensures that the level of additional stress is reduced on an individual’s financial status. If you have to employ credit for basic needs, do it carefully. Take only that which can be repaid, and always avoid taking high-interest options such as those that attract high interest rates or uniquely priced credit cards.
Be cautious with the conditions stated for issuing the loan, and provide preference to those loans that provide a lower rate of interest along with easy instalments to be paid. Do not opt for borrowing and instead consider the following options: selling other non-hood assets and moving to a cheaper place.
Last but not least, one has to make sure to remain positive and keep on trying in this phase. We understand the struggle to repay loan after job loss. But it is important to know that losing your job is often not a permanent matter and after some time you can find another job. Experience your efforts in the development of skills, claim social contacts and job search to enhance the probability of getting a new job.
When one is unemployed, it is good to keep on searching for jobs continually and getting employed in everyday activities to minimise the effects of unemployment on your emotional well-being. Finally, do not shy away from getting help from either the family or friends or even from support groups.
It is without a doubt that it is hard to repay loan after job loss, but repayments do not have to be impossible, as shown below. Thus, through an evaluation of your financial status, liaison with your lender, considering government aid options, and consulting a professional, one can successfully manage this dire time and strive to regain financial balance.
Just bear in mind that the main idea is to stay active, ask for help if things get tough, and stay positive as you try to overcome this short-term adversity.
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Unifinz Capital India Limited is a Non Banking Finance Company (NBFC) registered with the Reserve Bank of India (RBI). lendingplate is the brand name under which the company conducts its lending operations and specialises in meeting customer’s instant financial needs.
