32-Year Old Struggling With Personal Loan EMIs, Seeking Help

Ans: Your financial situation is challenging but manageable with the right strategy. You need a structured approach to reduce your loan burden while ensuring financial stability. Below is a step-by-step plan to help you manage your EMI payments effectively.

Assess Your Current Financial Situation
You have two personal loans totaling Rs. 7 lakhs.
The Rs. 2.25 lakh loan EMI is being paid on time.
The Rs. 4.75 lakh loan EMI is difficult to pay due to job loss.
Your lender has rejected the restructuring request.
You are doing odd jobs to cover partial EMIs.
You have borrowed money from family and friends for health-related expenses.
Immediate Steps to Reduce EMI Pressure
Prioritise Essential Expenses

Focus on necessities like rent, food, and medical expenses.
Cut down on discretionary spending.
Avoid new loans or credit card debt.
Try Negotiating Again with the Lender

Approach the lender with a new repayment proposal.
Request a lower EMI based on your current earnings.
Highlight job loss and health issues in your request.
If needed, offer partial payments to show commitment.
Seek Financial Assistance from Family or Friends

Consider borrowing a small amount to clear missed EMIs.
Ensure you repay them once you secure a stable job.
Use Savings or Liquid Assets

If you have emergency savings, use them for EMI payments.
Consider selling small assets or non-essential valuables.
Medium-Term Solutions for Loan Management
Debt Consolidation Loan

Apply for a new loan with a lower interest rate.
Use it to pay off the Rs. 4.75 lakh loan.
This can reduce your EMI and extend the tenure.
Compare interest rates before applying.
Balance Transfer to Another Bank

Some banks offer lower interest rates for balance transfers.
Shifting your loan to another bank can reduce EMI pressure.
Check the processing fee before proceeding.
Freelance or Part-Time Work

Explore temporary jobs or online gigs.
Any additional income can help cover EMIs.
Consider skills-based freelancing for better income.
Emergency Loan from Employer or Community Groups

Some organisations offer interest-free loans to employees.
Community groups may provide financial assistance.
Check for government schemes supporting job seekers.
Long-Term Strategies for Financial Stability
Build an Emergency Fund

Once you secure a job, start saving for emergencies.
Keep at least six months' expenses as an emergency fund.
This will prevent future financial stress.
Improve Credit Score

Pay EMIs on time to avoid credit score damage.
Avoid multiple loan applications in a short period.
Good credit history will help in future financial needs.
Plan for Future Expenses

Set financial goals for savings and investments.
Avoid unnecessary borrowing in the future.
Invest in health insurance to cover medical emergencies.
Final Insights
Focus on paying the overdue EMI as soon as possible.
Explore options like debt consolidation or loan balance transfer.
Look for additional income sources to ease financial pressure.
Once stable, build an emergency fund to avoid similar issues.
Stay disciplined with spending and financial planning.
If you need more personalised guidance, feel free to reach out.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment