Hi sir I'm 26 years old I do have a personal loan 60k
And credit outstanding amount of 56k of 70k limit and 3 and small loan 9k and 20k and 32 k and also I have a business loan of 70k outstanding amount of 38k and i don't do a business any more so I'm working and earning 25k months anfd rented a room of 7k so I don't miss my loan payment but because of my credit utilisation is high I could not get any higher loan which I want to take and close all loan and outstanding credit and focust on one loan emi payment so plz of there any suggestions and idea to help me out I'll be verry great full thank you
Ans: You are taking full responsibility. That’s a great step.
You are 26 years old. You have a monthly income of Rs.25,000.
You live in a rented room paying Rs.7,000 rent.
You are managing to pay EMIs regularly, which is good.
But high credit card usage and multiple small loans are affecting your credit score.
You want one big loan to repay all others and focus on one EMI.
Let’s explore your case in detail and build a solution that works for you.
Understanding Your Current Situation
Your monthly income is Rs.25,000.
You pay Rs.7,000 as room rent every month.
That leaves you with Rs.18,000 for EMI and other expenses.
You are managing your loan payments on time. That’s a good habit.
But your credit card has Rs.56,000 used out of Rs.70,000 limit.
That is almost 80% credit utilisation. That reduces your credit score.
You also have small loans of Rs.9,000, Rs.20,000 and Rs.32,000.
Your old business loan has Rs.38,000 outstanding now.
Total outstanding across all loans is around Rs.1.55 lakhs.
You are not defaulting. But multiple loans make it hard to get a new big loan.
Lenders see high utilisation and multiple active loans as risky.
Why Credit Score is Low Right Now
Credit cards should not be used beyond 30% of limit.
You are using 80% of your credit card limit.
That lowers your credit score sharply.
Multiple loans from different lenders also create negative image.
Even if you are paying on time, the system sees you as credit-hungry.
That stops you from getting a new loan.
Your Thought is Correct – One Loan is Better
One loan with single EMI is always better than 5 small loans.
It’s easier to manage.
It improves your credit score faster.
It reduces monthly confusion and mental pressure.
Also helps you plan savings better.
But Why You Are Not Getting a New Consolidation Loan Now
Banks are checking your credit score and seeing high card usage.
They are also seeing 5 open loans. That’s a red flag for them.
Even though total loan amount is not very high, lenders don’t see it that way.
Lenders want to give loan to people who look stable, not stressed.
What You Can Do Now Step-by-Step
Let us go step-by-step in your case. These are realistic and practical.
Step 1: Stop Using Your Credit Card for Now
Use only debit card or cash. Avoid any credit card purchases now.
Every new swipe will increase your credit usage and lower your score further.
Try not to spend from your credit card until it is fully paid.
Step 2: Pay Off the Smallest Loans First
You have 3 small loans — Rs.9,000, Rs.20,000, and Rs.32,000.
Focus on closing Rs.9,000 loan first.
Then go for Rs.20,000.
Then the Rs.32,000 one.
Every loan closure improves your score.
Even closing one small loan increases your chance to get a bigger loan.
It will also reduce your monthly EMI burden.
Step 3: Don’t Miss Any EMI Ever
Even one missed EMI can delay your score improvement by 6 months.
Always pay loan EMIs before due date.
If needed, cut down on other personal expenses like dining, mobile recharge, or travel.
Your priority is loan EMI first.
Step 4: Talk to a Certified Financial Planner or MFD for Debt Counselling
You may think CFPs are only for rich people. But they help everyone.
A good Certified Financial Planner can analyse your loans and build a simple repayment plan.
They can also connect you to NBFCs who give consolidation loans.
CFPs give emotional support too, not just financial advice.
Step 5: Use EMI Moratorium Only if Things Get Very Hard
You can request for loan restructuring or moratorium if things go out of hand.
But only use this option as last resort.
Moratorium affects your credit report for 6 to 12 months.
It should not be the first choice.
Step 6: Don’t Apply for Any More Loans Now
Every new loan application creates a hard enquiry.
Too many enquiries in credit report will hurt you more.
For now, focus on reducing your loans. Don’t try for a new one.
Wait for at least 3 months of regular payment and credit card discipline.
Step 7: Try for a Salary Advance from Employer or HR
If you work in a company, try asking for a salary advance.
Some employers give interest-free salary advance for emergencies.
That can help you close a small loan without affecting credit score.
Step 8: Start Building a Simple Emergency Fund
After clearing 1 or 2 loans, begin saving Rs.1,000 every month.
Build emergency fund slowly. You don’t need a big amount in one shot.
Emergency fund stops you from taking new loans for small issues.
This is a very important part of financial peace.
Step 9: Consider a Peer-to-Peer Lending Platform
Some peer-to-peer (P2P) platforms give small consolidation loans.
They are not banks, but they offer structured loans.
Their rules are less strict than banks.
But always check the legal approval and RBI registration before using them.
Step 10: Start Improving Your Credit Score Bit by Bit
Credit score is like a school report card. You must build it year by year.
Close small loans.
Don’t spend more than Rs.10,000 on your credit card until score improves.
If you pay full dues and stay below 30% limit, score improves fast.
Check score once in 6 months using platforms like CIBIL or Experian.
Why Not Take Loan from Friends or Family
You may think to borrow from friends. But that creates emotional pressure.
Family support is good, but should not be taken for granted.
Always try to repay every personal loan with respect.
If you borrow, write it on paper and keep track.
Avoid Payday Apps and Fast Loan Apps
Never use mobile apps that give 1-hour loan with 40% interest.
These apps are illegal and harmful.
They threaten, misuse data, and insult borrowers.
Always stay with legal lenders, NBFCs or banks.
Avoid Real Estate or Gold Loan to Pay Off Debts
Don’t pledge gold for these small loans.
Don’t try to invest in land or property when you are under loan pressure.
Real estate is not the answer to solve loan problems.
Final Insights
You are thinking in the right direction. That is a strength.
Trying to close all loans with one EMI is a smart plan.
But you need to first improve your credit score before getting that big loan.
Pay off smallest loans one by one. It is the fastest way to build score.
Use credit card only after full payment. Never more than 30% of limit.
Avoid taking new loans or applying for loans again and again.
Focus on repaying old ones and then apply after 6 months.
Build a small saving habit also once 1 or 2 loans are closed.
Don’t worry too much. Many have come out of this same situation.
With some discipline, you can also be debt-free in 12 to 18 months.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
