At the age of 35 I had 15 lakhs saving, but due a surgery at home I had to almost empty it, on top of it even I had gone through and surgery plus even my father too ( all three generations nero issue) from +15 I went to 25lakhs of debt
From various apps and financial sector.
I was able to settle few loans and credits but still my outstanding is approx 20 lakhs. My monthly income is 25000 and my only intrest per month is 12500
How do I get of it asap, as living a normal life seems magic.
Ans: Your financial situation is challenging, but not impossible to fix. With a structured approach, discipline, and patience, you can come out of this debt and regain financial stability. Below is a step-by-step guide to help you get back on track.
Understanding the Current Financial Situation
You had Rs. 15 lakhs in savings, but due to medical emergencies, your finances took a hit.
Now, you are left with Rs. 20 lakhs of debt, with an income of Rs. 25,000 per month.
Your monthly interest alone is Rs. 12,500, which is eating up 50% of your earnings.
The key priority should be reducing interest burden and increasing cash flow.
Steps to Reduce Your Debt Faster
1. Stop Borrowing More Money
Do not take new loans to pay old loans.
Avoid borrowing from friends or family unless it is interest-free and comes with no pressure.
Stay away from personal loans, credit card loans, and payday loans, as they have high interest rates.
2. Prioritise High-Interest Loans First
List down all your loans and interest rates.
Pay off loans with the highest interest rate first.
If possible, negotiate with lenders for lower interest rates.
3. Consolidate Loans for Lower Interest Rate
Check if a bank can give you a low-interest personal loan to clear high-cost debts.
If you have a good credit history, you may get a balance transfer facility on credit cards or personal loans.
Consider a secured loan against any assets, but only if the interest rate is much lower.
4. Increase Your Monthly EMI Payment
Paying only the minimum EMI will keep you stuck in debt for years.
Try increasing your EMI by even Rs. 2,000-3,000 per month to reduce the loan tenure.
Any extra income, bonus, or gift money should go towards clearing debt first.
Boosting Income to Tackle Debt
5. Explore Part-Time Work or Freelancing
A second source of income can help you clear your debt faster.
Consider freelancing, online tutoring, content writing, data entry, or delivery jobs.
If possible, take up overtime or extra shifts at work.
6. Use Your Skills to Earn More
Identify any skills that can help you earn extra money.
If you have a talent for repair work, photography, teaching, or writing, offer your services.
Even small extra earnings of Rs. 5,000-10,000 per month can speed up debt repayment.
7. Rent Out Assets for Passive Income
If you have an extra room, vehicle, or any asset, consider renting it.
This can bring in some cash flow without extra effort.
Cutting Expenses to Free Up More Cash
8. Reduce Non-Essential Spending
Track every rupee spent and eliminate unnecessary expenses.
Stop eating out, buying expensive clothes, or making impulsive purchases.
Switch to cheaper alternatives for groceries, transport, and entertainment.
9. Pause Investments Until Debt is Cleared
Right now, clearing debt should be the priority over investing.
Stop SIPs or investments temporarily and resume them once debts are under control.
Avoid risky investments like stocks or crypto, as losses can worsen your situation.
10. Negotiate Bills and Cut Fixed Costs
Talk to your landlord, service providers, and utility companies for possible discounts.
If possible, shift to a smaller house or a cheaper location to save on rent.
Reduce electricity, water, and mobile bills by using them wisely.
Managing Financial Stress and Mental Health
11. Accept the Situation Without Guilt
Medical emergencies are unpredictable, and you did what was needed for your family.
Do not feel guilty or blame yourself. Instead, focus on the solution.
12. Involve Your Family in Financial Planning
If you have a spouse, siblings, or parents who can help, discuss the situation with them.
They may not be able to give money, but they can support in other ways.
13. Stay Positive and Focused
Financial stress is tough, but worrying too much will not solve the problem.
Stay focused on taking action every month to improve your situation.
Celebrate small wins like closing one loan or saving an extra Rs. 1,000.
Long-Term Financial Stability
14. Build an Emergency Fund Once Debt is Cleared
After clearing debt, start saving at least Rs. 2,000 per month as an emergency fund.
This will help in handling future emergencies without taking loans.
15. Invest Smartly for Future Growth
Once financially stable, invest wisely in well-managed mutual funds for long-term wealth.
Avoid financial products with hidden charges like ULIPs or endowment plans.
16. Get Proper Health Insurance
Medical expenses caused the current debt. Invest in health insurance to prevent this in the future.
Look for affordable policies covering major illnesses.
Finally
The journey out of debt is difficult but achievable with the right approach.
Focus on reducing high-interest loans, earning more, and cutting unnecessary expenses.
Take small steps each month, and within a few years, you will be debt-free and financially stable.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
