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Ramalingam Kalirajan |11060 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Feb 05, 2026

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Feb 05, 2026Hindi

My father's monthly income is 1.5L and he has multiple EMI's of unsecured loans of monthly 2.1L which makes it difficult/impossible to pay and it forces to take a new loan just to pay the monthly EMI The Total loans are worth 59Lakh Rupees and it is increasing month by month. None of the bank and private financial companies are providing loan too now and it is at this stage. What is recommended to do? Household Monthly Expenses-30k-35k Their Income-1.3-1.4L I am a Student age - 20 His Age-55 Loan Details- All Personal Unsecured Loans one after another current outstanding 60Lakh Assets- Just House and 2 Agricultural Lands Current Monthly EMI - 2,01,000 Rs No Savings more than 3-4 Lakhs

Ans: It takes courage to explain such a situation clearly, especially at your age. This problem is serious, but it is not the end. With the right steps, damage can be controlled and stability can slowly come back.

» Understanding the real problem
– Monthly income is around Rs 1.3–1.4L
– Monthly EMI is around Rs 2.01L, which is much higher than income
– Household expenses of Rs 30–35k are reasonable and not the issue
– All loans are unsecured personal loans, which usually have very high interest
– New loans were taken only to pay old EMIs, creating a debt trap
– No lender is willing to give further loans, which means the cycle has hit a wall

This is not a cash flow problem alone. This is a structural debt problem.

» Why the situation is getting worse every month
– EMI is higher than income, so default is unavoidable
– Unsecured loans grow fast because of high interest
– Paying EMI by taking another loan only increases total outstanding
– Stress and pressure often delay tough but necessary decisions

This is not about discipline or effort. The numbers simply do not support continuation.

» Immediate actions that must be taken
– Stop taking any new loan under any condition
– Stop using credit cards, overdrafts, or informal borrowing
– Keep aside money only for food, electricity, and basic needs
– Do not promise EMIs that cannot be honoured

Missing EMIs is emotionally hard, but continuing like this is financially destructive.

» How to handle lenders and EMIs
– Do not avoid calls, but communicate calmly
– Explain income reality and inability to pay current EMI
– Request restructuring, lower EMI, or temporary relief
– Some lenders may not agree immediately, but communication matters

Paying something small is better than paying nothing, but only if it does not create new debt.

» Role of assets in this situation
– You mentioned a house and two agricultural lands
– These are not investments right now; they are safety tools
– When unsecured debt becomes unmanageable, asset-based resolution becomes necessary
– Clearing high-interest unsecured loans is more important than holding assets under pressure

This is not a loss of status. This is a step to protect the family’s future.

» What should NOT be done
– Do not take loans from friends or relatives to pay EMIs
– Do not fall for private lenders promising quick money
– Do not put pressure on yourself as a 20-year-old student to fix everything
– Do not ignore the problem hoping income will suddenly rise

Hope without action only increases damage.

» Your role as a student and family member
– Your focus should remain on education and skill building
– Do not sacrifice your future to solve today’s crisis
– Emotional support to your father is important, not financial burden
– Decisions should be taken by elders with professional guidance

This problem was created over time and must be solved structurally, not emotionally.

» Long-term correction mindset
– Unsecured debt must be reduced drastically
– Once stability comes, no borrowing without repayment capacity
– Emergency fund should be built slowly in future
– Insurance and savings come only after debt control

Right now, survival and stabilisation are the priorities.

» Final Insights
– The current EMI level is not sustainable under any scenario
– Continuing the same approach will only increase stress and debt
– Tough decisions taken now can prevent permanent damage
– This phase will pass if addressed directly and honestly
– You are asking the right questions early, which itself gives hope

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

Asked on - Feb 05, 2026 | Answered on Feb 06, 2026

He has 2 agricultural lands from which 1 is worth 15Lakhs and another of 60-70 Lakhs which should he consider selling. And also from the past 3 months he was looking for mortgage secured loan on house of 25Lakh but it is not being approved by the bank so should he wait for it more or should consider selling the land?? The debt has been increased by 3.3Lakhs this month too which makes it exceed 60Lakhs Is there any other option than selling the land anything else His Cibil Is 714 But no bank is approving secured loan too why is it so? Today a finance company named western capital lmt said that they can do a secured loan of 30Lakhs but I haven't heard of this company before and there is less information available about it online too... Should he proceed taking a loan like this or selling the land would be wiser decision?? He just keeps ignoring it as it will be automatically structured and just keeps lending money from relatives or friends to pay the EMI I Have instructed multiple times that we have to do something but ignoring me the Loan has been increased by 13Lakhs just to pay the EMI's. Just keeps looking for new loans every month and this cycle repeats until every 1-10th of the month. Then ignoring till the deadline or EMI Date at which time i manage money through my friends which i have stopped doing now as I don't think it is good. Also yesterday he tried to apply for Bajaj Finance Cash Credit of 10Lakhs which hopefully got rejected and also he made a new account of SBI Cash Credit-3.5Lakh Rs Also Took a gold loan of 2.7Lakh In January I am explaining this everyday that we have to take some action against it so that it will become stable but my parents just wait for some miracle to happen without taking any action just calling for loans, trying for secure loans,etc.

Ans: Your concern is valid and timely.

» Selling Asset vs Taking New Secured Loan
– Waiting for a secured loan approval is no longer practical; banks are rejecting due to high unsecured exposure and rising monthly stress, not just CIBIL
– Taking a secured loan from an unknown finance company is risky and can worsen the trap with higher interest and strict recovery
– Using one loan to pay another has already increased debt sharply and must stop

» Which Land to Consider
– Selling the smaller agricultural land first is the wiser step to immediately reduce high-interest unsecured loans
– Clearing a large portion of unsecured debt gives breathing space and prevents further damage

» What Must Stop Immediately
– No new loans, cash credit, gold loans, or borrowing from relatives
– Ignoring the problem will only increase loss

» Final Insights
– Asset sale is damage control, not failure
– Reducing debt is more important than waiting for miracles

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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