Lost Your Job? Fret Not! Follow These Steps

By | May 24, 2017

Lost Your Job? Fret Not! Follow These Steps

India’s unemployment statistics are climbing while large companies are also reducing headcounts by the thousands. Losing one’s job is an unpleasant experience, and it may also take away one’s financial securities. However, you can take some smart steps to ensure that your layoff isn’t financially taxing.

Here are some ideas to get you through.

Before The Layoff

Create An Emergency Fund: An emergency fund should be ideally worth six to twelve months of your current monthly income. It should be saved in a liquid, low-risk instrument such as a bank deposit or a Liquid Mutual Fund. This fund should be kept for the sole purpose of helping you get through a difficult period such as a job loss. It should also be large to cover your fixed expenses such rent or Home Loan EMIs, utilities, groceries, supplies, school fees, etc.

Get Insured Immediately: When you lose your job, you may also lose your employer-provided Health Insurance. In case of a sudden hospitalisation, you may have to pay a heavy cost. To avoid such a situation, immediately buy Health Insurance for all members of your family.

After The Layoff

Take Stock Of Money: Firstly, collect all your dues from your employer. There’s typically a severance pay worth at least a month’s pay offered to impacted employees. Next, take stock of your existing savings, funds and investments. This money should be enough to help you get through your immediate future. You must use these funds wisely, in a controlled manner.

Liquidate Investments, Carefully: Do not rush to liquidate all your investments. Rather, do this in a controlled, need-based manner. For example, instead of liquidating your entire Mutual Fund folio, you may want to redeem only what you need for the immediate future. Do not file a PF withdrawal right away. You must hold on to this money for your future needs.

Restructure Loans, If Needed: If your situation impacts your ability to pay your EMIs or Credit Card dues, you may want to intimate your lender at the earliest. In some loans, you are contractually bound to inform the lender about any changes in your employment status. If you are unable to pay EMIs, you should work with your lender to restructure your debt. For example, you may increase the loan tenure to reduce the size of the EMI.

Use Insurance Grace Period: If you’re unable to pay an upcoming insurance premium, you can contact your insurer to understand your policy’s grace period, which is typically 30 days for Life Insurance and 15 days for Health Insurance.

Sell Assets: To raise liquidity for your immediate needs, you may consider selling assets. For example, you may have a car whose EMI is burdening you. Therefore you may sell it and settle your car loan.

Use Credit, But Carefully: You must use your credit card cautiously during your layoff since you are not generating regular income to pay off your card dues. If you absolutely must, borrow from friends or relatives while asking for easy repayment terms.

Finally, you must put yourself on the job market at the earliest. While you search for a job, you may also support yourself with part-time or freelance assignments. You don’t need to lose your sleep over losing your job. With some smart planning, you can get out of your quagmire quickly.

(The writer is CEO, BankBazaar.com)

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.
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About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of BankBazaar.com. Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

4 thoughts on “Lost Your Job? Fret Not! Follow These Steps

  1. Sunil kumar gaur

    Please help me against my loan EMI’so
    My contact no is 8937081460

    1. Team BankBazaar

      Hi Sunil, How can we help you? What is your concern? Cheers, Team BankBazaar

  2. Azgar Ali

    Hi Team,
    I have lost my job as of 13th March 2020 and the reason was lack of performance mentioned by the employer. They made me apply for resignation and released me from the company. I have taken a personal loan from ICICI bank for 5-year terms, around 4 years ago. Only one more year left for remaining EMI’s, however due to loss of job I not in a position to pay my EMI’s. I request you to share your input with me so that it will assist me to follow them for the next process. Thanks.

    1. Team BankBazaar

      Hi Azgar,

      We’re sorry to hear this. You could get in touch with your bank and opt for a loan moratorium so that you can get more time to repay your loan. However, please note that interest will continue to accumulate on your outstanding during this time.

      Team BankBazaar


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