Sir i am 48 year old and had taken homeloan from AHFL 1500000 and 452000 from Bajaj Fin ltd and 200000 from market. My salary is 47000 and paying loan amount 37000 to all these people. I am now facing problem to run my family expense. What should i do to bring my loan at least upto 50%. What can be done to reduce my burden of loan. Please help.

Ans: Thank you for sharing your situation with me. Managing debt can be challenging, especially when it impacts your household expenses and family responsibilities. It's essential to approach this with a structured plan to regain control of your finances. Here’s how we can create a roadmap to help you tackle your debts effectively and ensure a stable financial future for you and your family.

Understanding Your Current Financial Situation
Before diving into solutions, let's outline your current financial position:

Income and Expenses:

Monthly Salary: Rs 50,000
EMI for Bajaj Finance: Rs 12,000
EMI for Cred: Rs 8,000
HDFC Credit Card Outstanding: Rs 1,45,000
Household and Living Expenses:

With significant EMIs, managing household expenses on the remaining income is challenging.
You have a three-year-old child, which means essential expenses like childcare, food, and utilities are non-negotiable.
Analyzing the Debt and Its Impact
Breakdown of Debt
Bajaj Finance Loan:

EMI: Rs 12,000
This loan is a significant chunk of your monthly budget.
Cred Loan:

EMI: Rs 8,000
Adding to your financial burden with another large EMI.
HDFC Credit Card Debt:

Outstanding Amount: Rs 1,45,000
Credit card debt usually has high interest rates, making it crucial to address quickly.
Impact on Monthly Cash Flow
After deducting EMIs (Rs 20,000) from your salary (Rs 50,000), you are left with Rs 30,000 for all other expenses. Managing household expenses with this remaining amount can be tight, particularly with the needs of a young child.

Steps to Manage and Reduce Your Debt
To effectively manage and reduce your debt, consider the following structured approach:

1. Create a Realistic Budget
Assess Your Monthly Expenses:

List all necessary expenses like rent, utilities, groceries, and childcare.
Identify discretionary expenses that can be reduced or eliminated.
Prioritize Spending:

Focus on essential expenses and allocate funds to high-priority areas first.
Plan a budget that accounts for your fixed costs and allows you to allocate a portion towards debt repayment.
2. Consolidate Your Debts
Debt Consolidation Loan:

Consider taking a personal loan with a lower interest rate to pay off high-interest credit card debt.
This can simplify your payments into one monthly EMI, potentially lower than your current combined EMIs.
Balance Transfer for Credit Card Debt:

Look for credit cards offering low or zero interest rates on balance transfers.
Transfer the HDFC credit card balance to such a card to reduce interest and focus on repaying the principal.
3. Negotiate with Creditors
Request EMI Restructuring:

Contact Bajaj Finance and Cred to explore options for extending the loan term or reducing EMI amounts temporarily.
Explain your situation and negotiate for more manageable terms.
Seek Interest Rate Reduction:

Talk to your credit card issuer (HDFC) to see if they can lower your interest rate.
Some creditors offer hardship programs that may reduce your interest rates or pause payments temporarily.
4. Increase Your Income
Explore Side Income Opportunities:

Consider freelance work, part-time jobs, or monetizing a hobby to supplement your income.
Look for opportunities that do not require significant upfront investment.
Seek Salary Increment or Promotion:

Discuss with your employer the possibility of a raise or promotion.
Highlight your contributions and the value you bring to the company.
5. Optimize Your Expenses
Cut Non-Essential Spending:

Reduce or eliminate spending on non-essential items like dining out, subscriptions, and entertainment.
Focus on necessary expenditures to free up more cash for debt repayment.
Look for Savings on Essentials:

Shop for groceries in bulk, use coupons, and find deals to lower your monthly expenses.
Consider switching to more affordable service providers for utilities or insurance.
6. Set Up a Debt Repayment Plan
Snowball Method:

Prioritize paying off smaller debts first while making minimum payments on larger ones.
This approach provides psychological wins and motivates continued progress.
Avalanche Method:

Focus on paying off high-interest debts first, which saves more on interest over time.
This method reduces the overall cost of your debt faster.
Hybrid Approach:

Combine both methods by paying off a high-interest small debt first, then proceed with the avalanche method.
This gives a quick win while focusing on reducing interest payments.
7. Emergency Fund Creation
Set Aside a Small Emergency Fund:

Build a modest emergency fund (Rs 10,000 - Rs 20,000) to cover unexpected expenses.
This prevents you from incurring new debt for emergencies.
Gradually Increase the Fund:

Once immediate debts are under control, aim to grow this fund to cover 3-6 months of living expenses.
This provides a financial cushion and enhances long-term stability.
8. Seek Professional Financial Advice
Consult a Certified Financial Planner (CFP):

A CFP can offer personalized strategies for debt reduction and financial management.
They can help you create a sustainable plan to meet your financial goals and obligations.
Debt Management Services:

Consider reputable debt management services that negotiate with creditors and help consolidate payments.
Ensure you understand the fees and terms before committing to any service.
Psychological and Emotional Considerations
Debt can be stressful and affect your mental well-being. Here are ways to manage this aspect:

1. Stay Positive and Patient
Focus on Small Wins:

Celebrate small achievements like paying off a loan or reducing outstanding debt.
These milestones keep you motivated and reinforce progress.
Maintain a Long-Term Perspective:

Understand that debt repayment is a gradual process requiring time and discipline.
Stay committed to your plan, and remember that each payment brings you closer to financial freedom.
2. Seek Support from Loved Ones
Communicate with Your Partner:

Discuss your financial situation openly with your spouse or family members.
Their support can provide emotional relief and practical help.
Join Support Groups:

Consider joining online or local groups focused on debt management and financial wellness.
Sharing experiences with others facing similar challenges can provide encouragement and new strategies.
Final Insights
Managing and reducing your debt requires a multifaceted approach involving budgeting, consolidation, income optimization, and disciplined repayment. By taking these steps, you can regain control over your finances and alleviate the stress caused by debt.

Regularly review your progress and adjust your plan as needed. Seek guidance from certified professionals to tailor strategies specific to your situation. With persistence and a structured approach, you will overcome this financial challenge and build a secure future for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are showing great courage. Managing seven family members with Rs. 50,000 income is not easy. You are also paying EMIs on Rs. 9 lakhs loan. With no investments, it is stressful. But there is always a way forward.

Let me guide you step-by-step. We will work on reducing stress. We will also plan for long-term financial safety. I will help you think from all angles.

Let’s begin with the key steps.

 

Review of Your Current Financial Pressure

 

Monthly income is Rs. 50,000. But EMIs are reducing your cash flow.

 

You are repaying two major debts. One is a loan of Rs. 4 lakhs. Other is a credit card due of Rs. 5 lakhs.

 

A family of 7 people needs careful budgeting. Every rupee has to work harder.

 

No investments yet. So, there is no passive income support.

 

This is a critical phase. Your present decisions will shape your financial future.

 

Debt Situation: High Risk Area

 

Credit card loan is very costly. Interest is very high, around 36–42% yearly.

 

That means your debt will double every 2 years if unpaid.

 

Bank loan EMI may have a lesser interest rate. But still, it adds monthly pressure.

 

Paying only EMIs will not reduce the principal quickly.

 

This leads to a long debt cycle. You will not get financial freedom.

 

Step-by-Step Plan to Regain Control

 

1. Prepare a Simple Budget Plan

 

List all monthly fixed expenses: food, rent, school, bills, and medicines.

 

Keep only very essential expenses for now. Avoid luxuries.

 

Prioritise survival and debt clearance. Delay wants.

 

Track every rupee spent. Use notebook or mobile app.

 

Fix a weekly cash withdrawal and live within that amount.

 

 

2. Emergency Pause on Credit Card Use

 

Stop using credit cards immediately. Cut them if needed.

 

Credit card loan grows every month due to high interest.

 

If you keep using it, you will never be free from debt.

 

 

3. Combine All Loans Into One

 

Visit a bank. Apply for a low-interest personal loan.

 

Use that loan to close all credit card dues.

 

Personal loan interest is 13–18%, much lower than credit card.

 

This is called debt consolidation.

 

This will reduce monthly EMI burden and help with mental relief.

 

Keep loan term short. Maximum 3 to 4 years.

 

 

4. Prioritise EMI Payments

 

Credit card EMIs should be first target. Clear this as fast as possible.

 

Do not take any new loan to pay old loan.

 

Avoid local moneylenders or chit funds.

 

Pay full EMI amount on time. Avoid penalties.

 

Try to make small extra payments to reduce balance faster.

 

 

5. Start a Side Income or Gig Work

 

One family member can try part-time or home-based work.

 

Can consider tuitions, cooking, tailoring, delivery, or online freelance.

 

Even Rs. 5,000 extra monthly will help reduce debt faster.

 

Try to convert any skill or hobby into income.

 

This extra income must be only used for debt repayment.

 

 

6. Sell Unused Assets to Repay Loan

 

Check if there is anything unused at home: old jewellery, gadgets, scooter, etc.

 

Sell it and use money to reduce your debt.

 

Reducing loan will reduce EMI and stress.

 

Try to close credit card debt first with such funds.

 

 

7. Talk to Family Honestly

 

Sit with family. Tell them about current debt pressure.

 

Take support from all. Even small savings from each person will help.

 

Children can be told gently. Teach them simple saving habits.

 

A joint team effort will reduce burden and improve discipline.

 

 

8. Stop All New Expenses

 

No new gadgets, gifts, festivals, or holidays till debt clears.

 

Spend only on food, education, health, and EMIs.

 

Control small spends like snacks, mobile data, and entertainment.

 

Small leakages add up to big wastage.

 

How to Begin Saving While in Debt

 

Many feel they must wait to save until all loans are over. But that’s not wise.

 

Saving even Rs. 1000 monthly gives hope and control.

 

Start a recurring deposit for Rs. 500 or Rs. 1000.

 

This creates habit and brings stability.

 

As debt reduces, increase saving amount slowly.

 

Your saving should happen side-by-side with loan payment.

 

Long-Term Financial Safety Steps

 

1. Buy Term Insurance (If Not Done Yet)

 

If you are the main earning member, your family depends on you.

 

If something happens to you, they should not suffer.

 

Term insurance is very cheap. It gives big safety.

 

Don’t go for endowment or money-back policies.

 

Buy pure term insurance for Rs. 50 lakhs to 1 crore.

 

 

2. Take Basic Health Insurance

 

Medical emergency is very costly.

 

Even a small surgery can cost Rs. 1 to 2 lakhs.

 

If you have no health cover, you may take fresh loan.

 

So, take a family floater plan of Rs. 5 lakh.

 

Premium is low. But it protects your savings and avoids new loans.

 

 

3. Slowly Start Investing

 

Once loans are under control and savings start, begin investing.

 

Mutual funds are a good option for long-term goals.

 

Please avoid index funds. They just copy market.

 

Index funds cannot beat inflation consistently.

 

Actively managed mutual funds are better.

 

Certified Financial Planners select such funds with full research.

 

Also, avoid direct funds. They have no expert guidance.

 

Regular funds through a trusted Mutual Fund Distributor with CFP help is safer.

 

You get reviews, goal planning, and disciplined investing.

 

Start with Rs. 1000 SIP after 1 year of regular savings.

 

Goal Planning: Think Small and Simple First

 

You may not have goals now due to pressure. But start listing small goals.

 

Goal 1: Pay all loan in 3 years.

 

Goal 2: Build Rs. 1 lakh emergency fund.

 

Goal 3: Buy term and health insurance in 1 year.

 

Goal 4: Start SIP in mutual fund in 1–2 years.

 

Goal 5: Prepare for child’s education with monthly savings.

 

Slowly, your future becomes brighter and predictable.

 

Mindset Change is the Biggest Asset

 

You may feel tired. But you already made the first right move.

 

Asking for help and planning shows strength.

 

You are doing better than many who ignore their debt.

 

You must continue with discipline and patience.

 

Small steps daily lead to financial peace later.

 

Finally

 

Your situation is difficult, but not impossible. You must control your spending.

 

Pay off credit card loans first. They are urgent.

 

Talk with your bank about loan restructure or consolidation.

 

Take support from family. Try to increase income.

 

Start saving even in small amounts.

 

Avoid all unnecessary new loans or expenses.

 

Get basic insurance protection before starting investments.

 

Later, begin SIPs in mutual funds with CFP guidance.

 

You can build a solid future, step by step. Stay consistent and hopeful.

 

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: You are already 50 years old. You earn Rs. 25,000 per month.

You have two loans—gold loan and personal loan.

You are struggling because income is low and expenses are high.

But still, there is a clear way forward.

You can come out of this loan stress step by step.

Let me help you with a complete 360-degree solution.

Each step is simple and practical.

Let us start.

Understanding Your Current Financial Picture
Monthly income: Rs. 25,000

Gold loan: Rs. 3 lakh with EMI Rs. 3,000/month

Personal loan: Rs. 65,000 with EMI Rs. 6,000/month

Total EMI: Rs. 9,000 per month

EMI is 36% of your income

No bank balance, no emergency fund, no mutual fund savings

Financial stress is high

But the personal loan will close in 8 months

That is a good start

Let’s plan step by step to reduce your loan burden and rebuild your finances

Step-by-Step Loan Burden Reduction Plan
Step 1: Control Monthly Expenses Strictly
First, reduce all non-essential expenses

Food, transport, mobile, electricity—all must be tightly controlled

Aim to live within Rs. 12,000–14,000 per month

Avoid shopping, eating out, or giving money to others

Track every rupee using a small diary or mobile app

Try to create Rs. 2,000–4,000 monthly surplus from budget

Step 2: Do Not Miss EMI Payments
Always pay EMIs on time

Missing EMI will hurt your credit score

It will also increase penalty and interest burden

Pay personal loan EMI first

Because it will close in just 8 months

After that, you will get Rs. 6,000/month as relief

Step 3: Do Not Take Any New Loan
Say NO to any new gold loan, personal loan or credit card

Do not borrow from neighbours or local lenders

Focus only on repaying what you already owe

Step 4: Plan for Faster Gold Loan Repayment After 8 Months
After personal loan closes, your monthly EMI burden drops to Rs. 3,000

You will have extra Rs. 6,000 each month

Use that full Rs. 6,000 to repay gold loan faster

Try to pay more than EMI if possible

Once gold loan closes, all your EMIs are over

Then full Rs. 9,000 monthly becomes free for savings

Step 5: Start Building Emergency Fund Slowly
Once all EMIs are done, first create emergency savings

Keep Rs. 10,000–15,000 in bank or savings account

This will help if any health issue or income break comes

Without emergency fund, loan cycle will repeat

Step 6: Avoid Gold Loans in Future
Gold loans look easy but can trap you in high interest

Try to avoid pledging gold again unless emergency

Build a habit of saving regularly

Even small savings of Rs. 1,000–2,000 per month help in future

Step 7: Look for Extra Income Sources
Your income is low. So try to increase it

Look for part-time evening job, weekend work or side business

You can also try small freelancing or tuition work

Even extra Rs. 2,000–3,000 monthly will help loan repayment

Use extra income only to reduce debt or build savings

Step 8: Build Monthly Savings Once Loans Are Closed
After 14–15 months, your EMIs will end

You must start SIP in mutual funds via Certified Financial Planner

Start even with Rs. 1,000–2,000 per month

Choose regular plans through MFD + CFP for better guidance

Over time, you can increase SIP slowly

This will create long-term wealth and reduce future money stress

Step 9: Protect Yourself with Insurance
Health issues can drain money fast

Try to take a low-cost health insurance plan if not already covered

If you have family, a basic term insurance is also important

This will protect them from loan burden if something happens to you

Step 10: Mentally Prepare for a 2-Year Turnaround
You cannot remove this burden overnight

But in 2 years, you can become debt-free and stable

Follow this plan strictly

Do not get discouraged

Stay focused, stay disciplined

Many people like you have done it

You can also come out stronger

What You Should Not Do Now
Do not invest in ULIPs or any insurance + investment product

Do not put money in chit funds or risky schemes

Do not lend money to others even if they promise return

Do not fall for any “quick loan clearance” agencies

Do not buy land, gold or gadgets on EMI

Do not quit job unless new one is ready

What You Must Do Regularly
Track income and expenses every week

Avoid unnecessary travel or spending

Keep gold safe at home after gold loan is cleared

Keep bank balance of at least Rs. 10,000 always

Build habit of saving even Rs. 100 daily

Teach family to support and save together

Stay motivated by thinking of debt-free future

Finally
Right now you are under financial pressure

But the situation is temporary

With tight spending, no new loans, and better income focus

You will become debt-free in 14–15 months

After that, you can build savings and plan for future goals

Mutual fund SIPs are the best long-term tool to grow wealth

Use help from a Certified Financial Planner to guide your savings

Avoid ULIPs, endowment, and poor insurance schemes

Once stable, build a financial plan for retirement in the next 8–10 years

Even if you start late, steady action gives results

Your loan burden will reduce soon—keep strong focus and move step by step

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: – You have faced a tough family situation with honesty.
– Many hide or delay in such matters.
– You are facing it now. That is very important.
– You are taking responsibility. That shows maturity and strength.
– With proper steps, even this problem can be solved over time.

» Understanding your present money position
– Salary is Rs.1 lakh per month.
– Rs.51,000 goes to loan EMIs.
– Rs.30,000 goes to monthly living.
– Rs.20,000 is left as potential savings.
– There are also upcoming needs like marriage and home repairs.
– Family loans and gold loan also create pressure.
– Brother’s loans are not in your control.
– Bank loans and family dues now sit on your head.

» Identifying priority areas
– First, protect your essential needs.
– Food, rent, medical, basic transport should always continue.
– Second, stop any new expenses that are not essential.
– Third, restructure debts for relief.
– Fourth, plan marriage and home work only after debt under control.
– Fifth, avoid new loans for non-essential purposes.

» Managing your debt situation step by step
– You need to combine some loans if possible.
– A personal loan top-up or balance transfer at lower rate can help.
– If interest rates differ widely, bring them together under one lower rate.
– A structured repayment plan can reduce EMI burden and free cash flow.
– Some banks allow tenure extension to reduce monthly EMI pressure.
– This gives breathing space to build a buffer.
– Discuss with banks about hardship restructuring. They sometimes allow step-up EMIs.

» Handling family obligations
– Family loans are emotional. But you must treat them as financial liabilities.
– Talk openly with family members.
– Explain your cash flow and commitments.
– Create a repayment timeline with them.
– Avoid paying everything at once by borrowing more.
– Negotiate partial settlements or phased repayment.
– Most relatives will understand if you are transparent and sincere.

» Managing your mother’s gold loan
– Gold loan has collateral. The gold is at risk.
– Try to repay this loan first if interest rate is high.
– Gold is an emotional asset, not just financial.
– If needed, restructure it into a personal loan at lower rate.
– Once gold is released, you can keep it safe for family security.

» Saving for marriage and home repairs
– Marriage budget of Rs.8 lakh is big under current load.
– Reduce wedding costs if possible.
– Small, simple marriage now can save stress.
– Any saved money can reduce debt.
– Home repairs of Rs.5 lakh can wait till stability returns.
– Focus on safety repairs only. Luxury changes can be postponed.
– Avoid mixing loans for marriage or home upgrades now.

» Building an emergency buffer
– With all pressure, a safety net is missing.
– Even Rs.50,000 in bank can help during sudden needs.
– Use the Rs.20,000 monthly savings to build small emergency fund first.
– After that, direct it towards debt prepayment.
– Do not start new investments till loans are under control.

» Emotional and behavioural money control
– Say no to unnecessary expenses for next 2–3 years.
– Stop any lending to others, even family, until you are stable.
– Keep your partner informed before marriage. Transparency builds trust.
– Avoid guilt for brother’s mistakes. You are already helping beyond duty.
– Keep mental health strong. Money stress can harm decision-making.
– Small progress every month will build confidence.

» Long-term investment preparation
– Once debt pressure reduces, investments must start.
– Use mutual funds through MFD with CFP guidance for growth.
– Avoid direct funds. They do not provide guidance or handholding.
– Regular funds with CFP support give rebalancing, review, and tax optimisation.
– Active mutual funds beat market average over time with right selection.
– Index funds lack protection in falling markets. They follow market down fully.
– Active funds help handle risk better for long-term wealth creation.

» Retirement and future goals
– After clearing debt, save at least 25% of salary.
– Split into equity mutual funds, PPF, and small emergency fund.
– Review goals every year with a Certified Financial Planner.
– This ensures you stay on track even if income or expenses change.
– Keep gold or property for emotional needs only, not primary investments.
– Do not repeat high-risk family funding.
– Help only from surplus, never from core savings or loans.

» Professional support importance
– You have many moving parts: debt, marriage, family, and future.
– A Certified Financial Planner can create a debt repayment and savings path.
– They will help you with restructuring, negotiation, and asset allocation.
– This reduces pressure and increases clarity.
– You do not have to solve everything alone.

» Finally
– You are already on the right track by asking for guidance.
– You have income, willpower, and time. These three can fix this.
– First, secure essentials, then reduce debt pressure.
– Next, build small savings and emotional stability.
– Later, plan marriage within a budget you can handle.
– Finally, shift focus to long-term investments for wealth and retirement.
– With discipline, you can recover from this phase fully.
– Keep patience and steady action. Big problems need steady, small solutions.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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