Debt-ridden: How do I manage my personal loan EMIs with fluctuating income?

Ans: Losing a job and facing debt can be overwhelming. It is important to act swiftly to manage your financial situation.

Assess Your Financial Situation
List All Debts:

EMI of Rs. 35,000 per month.
Loans from various apps like Paytm and MoneyView.
Prioritize Debts:

Identify which debts have the highest interest rates.
Focus on these high-interest loans first.
Create a Budget
Calculate Monthly Expenses:

List essential expenses (rent, utilities, groceries).
Identify non-essential expenses you can cut.
Allocate Funds:

Ensure you cover essential expenses first.
Allocate remaining funds towards debt repayment.
Communicate with Lenders
Contact Loan Providers:

Explain your job loss situation.
Request for a temporary reduction or deferment in EMI payments.
Negotiate Repayment Terms:

Ask for extended repayment periods.
Request for lower interest rates if possible.
Seek Professional Help
Certified Financial Planner:

Consult a Certified Financial Planner for personalized advice.
They can help you create a debt management plan.
Credit Counseling Services:

Consider reaching out to credit counseling services.
They can negotiate with creditors on your behalf.
Increase Income Sources
Look for Temporary Work:

Consider part-time or freelance work.
Explore gig economy jobs like food delivery or ride-sharing.
Sell Unnecessary Assets:

Sell items you no longer need.
Use the proceeds to pay off debts.
Emergency Measures
Emergency Fund:

If you have an emergency fund, use it to cover essential expenses.
Avoid depleting it completely, keep some funds for unforeseen emergencies.
Friends and Family:

Consider borrowing from trusted friends or family.
Ensure you create a clear repayment plan to avoid misunderstandings.
Legal and Supportive Measures
Understand Your Rights:

Familiarize yourself with the laws regarding debt collection.
Loan apps must follow legal protocols; report any harassment.
Emotional Support:

Seek support from friends, family, or support groups.
Managing stress and mental health is crucial during this time.
Final Insights
Facing job loss and debt can be daunting. Take immediate steps to manage your finances. Prioritize essential expenses and debt repayment. Communicate with lenders and seek professional help. Look for temporary income sources and consider selling unnecessary assets. Protect your mental health and seek support from loved ones. With a strategic approach, you can navigate this difficult period and regain financial stability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello;

Sell any gold which you may have and repay the loan. Once the loan burden is over you can buy gold again later.

Check if you can port the loan to another lender with lesser rate of interest.

Borrow from your close relatives/employer, if possible, to get you over the loan and repay it later.

If the recovery agents are harassing you beyond due follow-up then report it to the Police/RBI.

Please be firm and positive to get over this difficult phase.

However if you feel depressed kindly consult a psychiatrist.

Best wishes;

Ans: Your debt is high, and your income is low. Paying EMIs on time has become difficult. This situation needs an urgent plan.

You are not alone. Many people face similar financial struggles. With the right steps, you can come out of this stress.

Assess Your Debt Situation
Total loan and credit card debt: Rs 20 lakh.

Monthly income: Rs 30,000.

EMIs and credit card bills are unmanageable.

Stress is increasing due to financial burden.

The first step is to stop taking new loans or using credit cards.

Prioritise Your Debts
Credit card debt has the highest interest (30-40% per year).

Personal loans have high EMIs and penalties for delays.

Secured loans (home, car) should be managed to avoid asset loss.

Focus on clearing high-interest debts first.

Negotiate with Banks and Lenders
Contact your bank and request a loan restructuring.

Ask for a lower EMI with a longer repayment period.

Request a moratorium (temporary pause on EMI) if needed.

Convert credit card dues into an EMI loan with a lower interest rate.

Negotiate for a settlement if repayment is impossible.

Banks prefer to restructure loans rather than declare them as defaults.

Debt Consolidation Options
If you have a low-interest secured loan option (like a gold loan), consider using it to clear high-interest credit card debt.

Avoid taking another personal loan to clear old debts. It will worsen your situation.

Increase Your Income
Look for part-time or freelance work for extra income.

If possible, sell unused assets (bike, gadgets, jewelry) to reduce debt.

Discuss with family members for temporary financial help.

Cut Unnecessary Expenses
Reduce spending on non-essential items.

Stop using credit cards immediately.

Follow a strict budget and use cash or debit cards for expenses.

Seek Professional Help
A Certified Financial Planner (CFP) can help create a repayment plan.

If stress is overwhelming, consult a financial counselor or mental health professional.

Final Insights
Your situation is difficult, but a step-by-step plan will help.

Stop new loans and credit card usage immediately.

Contact banks to negotiate for lower EMIs or settlement options.

Increase income through extra work and reduce expenses.

Seek guidance from a Certified Financial Planner.

You are not alone. With the right approach, you can come out of this financial struggle.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

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