Hi I am having 30 lakhs of debts , all are unsecured loans and I am unable to manage with 70k/ month salary . Can anyone guide me. Is there any debt consolidation agencies are there or debt settlement agencies? Currently I have cibil of 650-700...

Hi I am having 30 lakhs of debts , all are unsecured loans and I am unable to manage with 70k/ month salary . Can anyone guide me. Is there any debt consolidation agencies are there or debt settlement agencies? Currently I have cibil of 650-700 and please guide me on a emergency note. I am having many pressures to pay it

Ans: You are facing a serious financial challenge. But with a structured and practical approach, it is manageable. You can turn it around with right steps. Let me guide you professionally, step by step.

Current Debt Situation Assessment
Your total debt is Rs. 30 lakhs.

These are all unsecured loans. No collateral involved.

You earn Rs. 70,000 per month.

This means your EMI commitments are likely more than 60% of your income.

This is financially unsustainable.

Your credit score is between 650 and 700.

This shows some payment delays or defaults may have happened.

You are also under mental and emotional pressure. This is understandable.

Debt Management Priority Planning
First, stop borrowing more to pay existing loans.

Do not use credit cards or instant apps now.

Your first focus should be to regain cash flow stability.

List all your loans in one place: amount, EMI, interest, lender name.

Note down which loan is the costliest. Also note which one is defaulted.

Prioritise loans with higher interest and legal impact.

If you are already defaulting EMIs, speak to your lenders.

Ask for temporary moratorium or restructuring.

Keep all communications documented. Send follow-ups by email also.

Try to avoid legal escalation. That brings long-term damage.

Debt Consolidation Evaluation
Yes, there are agencies who help in loan consolidation.

These are not regulated fully. Be careful in choosing them.

You can also talk to banks or NBFCs directly.

Some banks give top-up personal loans to close other loans.

But your credit score may be a hurdle for such loans.

If you have a trustworthy family member with better credit, consider loan on their name.

That loan can be used to pay off your high-cost debts.

Try to convert high-interest loans to lower-interest ones.

For example, a credit card interest of 36% can be replaced with 14% loan.

But take new loan only if it reduces your monthly EMI burden.

And don’t use new loans for spending. Use it only to close earlier loans.

Debt Settlement Possibilities
Debt settlement is an option when repayment is not possible.

You can offer a lump sum to close the loan at lower amount.

But this impacts your credit score severely.

It is shown as “settled” in your CIBIL for 7 years.

Use this option only when you are completely out of options.

Speak to the bank’s collection team for settlement negotiation.

Some agencies also help in negotiation. But they charge high fees.

Be cautious of frauds. Don’t pay upfront fees to unknown agents.

If you use settlement, start rebuilding credit immediately.

Budget Optimisation and Expense Control
Next, create a monthly spending plan. Every rupee should have a purpose.

Eliminate all unnecessary expenses. Focus only on needs.

Cut down lifestyle and avoid non-essential EMI purchases.

Avoid eating out, entertainment, shopping, and weekend trips.

Don’t use BNPL or UPI credit services.

Try to live on Rs. 30,000 per month.

Use balance Rs. 40,000 for minimum EMIs and emergency.

Avoid using credit card to meet shortfall.

Emergency Support Actions
If you have gold jewellery, consider gold loan. Not gold sale.

Gold loan can be taken at 8%–10% rate. This is much cheaper than credit cards.

Use gold loan only to repay high interest unsecured loans.

You can repay the gold loan slowly and safely.

Avoid pawn brokers. Go to banks or approved NBFCs.

Income Enhancement Actions
Explore freelance or part-time work options. Even Rs. 5,000 helps.

Sell any unused items: electronics, gadgets, appliances.

Use online resale platforms. Small amounts add up.

If family members can contribute income, include that temporarily.

Try to improve your job skill and aim for salary hike in 6 months.

Long term recovery needs higher income, not just lower expenses.

Mental Health and Family Communication
You are under pressure. Please talk to someone close.

Mental stress can harm both money and health.

Share your situation with family members if possible.

Get emotional and moral support. It makes a big difference.

Don’t isolate yourself. Speak to one person daily.

Credit Score Repair Strategy
Once EMI payments are stable, credit score will start improving.

Make minimum payments on time every month.

Don’t close old credit cards if they are not overdue.

Avoid new credit applications for next 12 months.

Keep one secured credit line open. Eg: fixed deposit backed credit card.

Keep credit utilisation low. Below 30% of the limit.

Check CIBIL report once every quarter. Correct any errors.

Avoid These Common Mistakes
Don’t take advice from agents or YouTube without checking background.

Don’t share PAN, OTP, or bank details with any unknown party.

Don’t trust anyone who promises “loan wipe off” or “instant CIBIL fix.”

Avoid investing in unknown schemes now. Focus only on reducing debt.

Don’t take LIC policy loans unless policy is close to maturity.

Future Plan Once Loans Are Settled
Once your cash flow is clear, create emergency fund of 6 months income.

Start SIP in actively managed mutual funds through MFD with CFP certification.

Regular funds give guidance and support when markets are volatile.

Direct funds look cheaper, but they lack professional guidance.

Wrong direct fund choices may cost more than regular fund commissions.

Focus on wealth building only after clearing liabilities.

Insurance must be separate. Buy term plan only.

Don’t mix insurance and investment. ULIPs and endowment are not suitable.

Finally
Your situation is hard. But not impossible.

You need a clear plan, daily focus, and patience.

You can turn around your life in 24 to 36 months.

Many have done this before. You can do it too.

Take one action per day. Progress will follow.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

Ans: I truly appreciate your courage to ask for help. Let’s go step-by-step and see how we can rebuild your financial life completely.

Understand the Real Problem

– Total debt is Rs.26 lakhs (Rs.8 lakh personal loan + Rs.18 lakh credit card debt)
– Your salary is Rs.1.2 lakh monthly
– You trusted a wrong debt consolidation agency
– Now, you have defaulted on loans
– Lenders are calling and even troubling your family

This is serious. But you can come out of it. It needs planning and full commitment.

Immediate Financial Reality Check

– You have no savings now
– Your credit score must be very low now
– Legal notices or collection threats may already be coming
– Credit card interest is usually over 36% annually
– Personal loan rates can be 12–18% per year
– This creates a debt trap quickly

Your monthly salary is Rs.1.2 lakh.
But loan repayments + living expenses are more than this.
That’s why things are spiralling out of control.
You need a 360-degree recovery strategy now.

Don’t Panic – Start Taking Back Control

– Stop taking any more loans from friends or apps
– Avoid thinking emotionally now
– Focus on logic and step-by-step action
– Speak to your family honestly and ask for moral support
– Don’t hide from the banks – face the issue
– Ignoring banks makes things worse
– You must take initiative before legal action starts

It’s important to take the first step today.

List and Prioritise All Your Debts

Make a simple list:

– Bank Name
– Type (credit card or personal loan)
– Amount outstanding
– EMI or minimum due
– Interest rate

This will give a full picture.
From this, we can decide what to handle first.
Generally, credit cards must be handled first due to high interest.

Talk to Banks – Not Collection Agents

– Avoid speaking with collection agents
– They have no power to restructure or settle
– Always ask to speak directly with the bank's recovery or settlement department
– Go to the bank branch directly if needed
– Explain your full situation truthfully
– Ask for a restructuring or settlement offer

They may give:

– Longer repayment period
– Lower EMI
– Part payment settlement
– Interest waiver if paid in lump sum

You must document every discussion in writing.
Never agree to anything on just phone calls.

Debt Restructuring Can Help

If you approach the banks professionally:

– You may get a structured EMI plan
– Or even a one-time settlement offer
– This stops further harassment calls
– This shows your intention to repay
– Banks are more supportive to honest borrowers

You may need to submit:

– Salary slips
– Bank statements
– Employment letter
– Budget plan

If you show your full income and expense chart, they will listen better.

Avoid Third Party Agents or Fake Companies

– Do not trust unknown debt settlement companies again
– Many such agencies are not registered or legal
– They charge upfront but never help
– Some even misuse your data
– Always approach banks directly

Never give legal power or authority to third-party consultants without checking.

Make a Realistic Monthly Budget

Your monthly income is Rs.1.2 lakh.
Let’s try to break this:

– Basic household expenses: Rs.35,000 (rent, food, utility)
– EMI and credit repayment: To be negotiated
– Transportation: Rs.5,000
– Communication and essentials: Rs.3,000
– Emergency fund: Rs.2,000 (even if small)

Try to cut down every possible luxury.
Cancel subscriptions, avoid dining out, no shopping unless urgent.
Live very simply for next 2 years.
Use every extra rupee to repay debt.

Start Emergency Fund – Even Small Helps

Even Rs.2,000–3,000 per month can help.
Keep this in a separate savings account.
Never touch this for EMI or loans.
This will help handle surprise expenses.
If you touch credit card again, your recovery will be delayed.

Debt Avalanche or Debt Snowball Strategy

Choose one method to repay debt:

– Debt Avalanche: Pay highest interest rate debt first
– Debt Snowball: Pay smallest balance first, then next one

Both methods work.
Pick the one that gives mental peace and shows early progress.
You must feel like you are winning each month.

Try for Support from Employer (if possible)

– Some companies offer employee salary advance
– Or low-interest personal loans
– If this is available, check with HR or accounts team
– Repayments can be deducted monthly from salary
– Better than credit card interest

But only borrow if terms are clear and documented.

Avoid Credit Card Usage for Now

– Stop using credit cards immediately
– Deactivate auto-debit features
– Cut physical cards if needed
– Don’t take new cards to repay old ones
– This is a loop that never ends

Use only debit cards or cash for next 2 years.

Understand Legal Rights – Don’t Get Scared by Threats

– Bank can file legal case, but it takes time
– They cannot harass your family or friends
– Police cannot arrest you for civil loan defaults
– Only court can order any legal action
– Record all calls and messages
– File police complaint if anyone uses abusive language

Stand firm but be polite.
Show willingness to repay, but not fear.

Don’t Fall for Loan Apps or Instant Credit Promises

Many fake loan apps exist.
They offer fast credit but collect huge interest.
They harass customers if you delay.
Never borrow from unknown apps or online platforms again.
Keep your data and contacts safe.

Impact on Credit Score – Accept and Plan Forward

Yes, your credit score is damaged.
But it is not permanent.
With regular EMI payments and settlements, it improves.
Focus on building repayment history from now.

Credit score recovery takes 18–24 months.
Be patient and keep consistency.

No Mutual Fund Investment Now – Focus on Debt Clearance

At this stage, don't invest in mutual funds.
Even though they are powerful tools, wait till debts are clear.
Once your EMIs are under control, start investing monthly.
But only via regular plans through a Certified Financial Planner.

Avoid direct mutual funds.
Direct funds offer no support or customisation.
If you don’t manage properly, you may face more losses.
Regular funds via CFP give you:

– Clear goals
– Tax planning
– Risk-adjusted returns
– Professional fund choices
– Portfolio reviews

This will build long-term wealth safely.

Final Insights

– You are going through a tough phase
– But it’s fully recoverable with clear action
– Be disciplined, honest and patient
– Talk to banks directly, not agents
– Make repayment plan and follow it strictly
– Cut lifestyle to basic needs for next 2 years
– Don’t borrow more to cover old debt
– Never trust any third-party debt agent again
– Focus on future, not fear

Your future can be secure and strong.
You have the income. You need the plan.

Stay focused. You will bounce back soon.

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

Ans: You already built a solid foundation. Many investors delay planning. But you started early at 36. That gives you a strong advantage. You have no liabilities. You have long term thinking. You also have diversified savings like PPF, NPS, Emergency funds and direct stocks. That shows clarity and discipline. This approach builds wealth with less stress over time.

You also started systematic investments in equity funds. That is a positive step. Your selection covers multiple categories like large cap, mid cap, small cap, flexi cap, hybrid and precious metals. So the intent is right. You are trying to create a broad portfolio. That gives balance.

» Your Portfolio Composition Understanding
Your current SIP list includes:

Small cap

Mid cap

Flexi cap

Large cap

Large and mid cap

Hybrid category

Gold and Silver FoF

Equity and Debt allocation fund

Dynamic hybrid fund

This shows you are trying to cover many segments. But too many categories can create overlap. When there is overlap, you get confusion during review. It also makes portfolio discipline difficult. You may think you are diversified. But the holdings inside may repeat. That reduces efficiency.

Your portfolio now looks like:

Equity dominant

Hybrid for stability

Metals for hedge

So the broad direction is fine. But simplifying helps in long-term habit building.

» Fund Category Duplication
You hold:

Two flexi cap funds

One large and mid cap fund

One pure large cap fund

One mid cap fund

One small cap fund

Flexi cap funds already invest across large, mid, small. Then large and mid also overlaps. So the large cap exposure gets repeated. That may not add extra benefit. But it increases monitoring complexity.

So I suggest rationalising. Keep one fund per category in core. Keep satellite space for only high conviction.

» Core and Satellite Strategy
A structured portfolio follows core and satellite method.

Core portfolio should be:

Simple

Long term

Stable

Satellite portfolio can be:

High growth

Concentrated

Based on your thinking level, you can structure like this:

Core funds:

One large cap

One flexi cap

One hybrid equity and debt fund

One balanced advantage type fund

Satellite funds:

One mid cap

One small cap

One metal allocation if needed

This division gives clarity. You can continue SIPs with review every year. No need to stop and restart often. That reduces behavioural mistakes.

» Your Current SIP List Review with Suggested Streamlining

You can consider continuing:

One flexi cap

One large cap

One mid cap

One small cap

One balanced advantage

One equity and debt hybrid

You may reconsider keeping both flexi caps and both gold silver funds. One of each category is enough. Because too many funds do not increase returns. It complicates tracking.

Precious metal funds should not be more than 5 to 7 percent in your portfolio. This is because metals are hedge assets. They do not create compounding like equity. They act as protection during cycles. So keep them small.

» How to Use the Rs 6 Lakh Lump Sum
You asked about lump sum investing. This is important. Lump sum should not go fully into equity at one time. Markets move in cycles. So use a staggered method. You can invest the lump sum through STP (Systematic Transfer Plan). You can keep the amount in a liquid fund and set STP toward your chosen growth funds over 6 to 12 months.

This reduces timing risk. It also creates discipline. So your Rs 6 lakh can be deployed gradually. You may use 50% towards core equity funds and 30% toward satellite growth category. The remaining 20% can go into hybrid category. This gives balance and comfort.

» Regular Funds Over Direct Funds
One important point many investors miss. Direct funds look cheaper. But they demand deep knowledge, discipline, and behaviour control. Most investors lose more through emotional selling and wrong timing than they save on expense ratio.

With regular funds through a Mutual Fund Distributor with Certified Financial Planner qualification, you get guidance, structure and correction. The advisory discipline protects you during market extremes. That is more valuable than a small saving in expense ratio.

A personalised planner also tracks portfolio drift, rebalancing need and category shifts. So regular fund investing gives long-term benefit and behaviour coaching.

» Actively Managed Funds over Index or ETF
Some investors choose index funds or ETF thinking they are simple and cheap. But they ignore drawbacks.

Index funds or ETF will not avoid weak companies in the index. They will invest whether the company grows or struggles. There is no fund manager decision making. So when markets are at peak, index funds continue aggressive exposure. In downturns also they fall fully. There is no cushion.

Actively managed funds work with research teams. They can avoid bad sectors. They can shift allocation based on market and economy. Over long term, this gives better alpha and stability. So continuing with actively managed funds creates better wealth compounding.

» SIP Continuation Strategy
Once the rationalisation is done, continue SIPs every month without interruption. Pause and restart behaviour damages compounding power. SIP works best when you go through all market cycles. You benefit more during corrections because cost averaging works.

So continue SIP amount. You can also review SIP increase every year based on income. Increasing SIP by 10 to 15 percent every year helps you reach large corpus faster.

» Asset Allocation Based Approach
One key point in wealth creation is having the right asset mix. Equity gives growth. Hybrid gives balance. Metals give hedge. Debt gives safety. Your asset allocation should stay aligned to your risk profile and time horizon.

Since you are young and have long term horizon, higher equity allocation is fine. But as time moves, rebalancing is important. Rebalancing protects gains and restores allocation.

So review your asset allocation every year or during major life events like child birth, home buying or retirement planning.

» Behaviour Management
Many portfolios fail not due to bad funds. They fail due to bad decisions. Selling during correction. Stopping SIP when market falls. Chasing past return performance. These mistakes reduce wealth.

Your discipline so far is good. Continue to stay patient during volatility. Equity rewards patience and time.

» Financial Goals Clarity
Since you have no children now, you can decide your long-term goals. Typical goals may include:

Retirement

Future child education

Dream lifestyle purchase

Health care reserves

When goals are clear, investment purpose becomes stronger. So you can map each fund category to goal horizon. Short-term goals should not use equity. Long-term goals should use equity with hybrid support.

» Role of Review and Monitoring
Review once in a year is enough. Frequent review can create anxiety. Annual review helps check:

Fund performance

Expense drift

Category relevance

Allocation balance

Then adjust only if needed. This progress helps you stay confident and aligned.

» Taxation Awareness
Equity mutual funds taxation rules are:

Short term (below one year holding) taxable at 20 percent

Long term (above one year holding) gains above Rs 1.25 lakh taxable at 12.5 percent

Debt mutual funds are taxed as per your income slab.

So always hold equity funds for long term. That reduces tax impact and gives better growth.

» SIP Increase Plan
You can create a simple plan to increase SIP over time. For example:

Increase SIP at every salary increment

Increase SIP during bonus time

Use rewards or extra income for investing

This habit accelerates wealth. So by the time you reach 45 to 50 years, your investments could reach a strong level.

» Insurance and Protection
Before investing large, ensure you have term insurance and health insurance. If not already done, it is important. Insurance protects wealth. Without insurance, even a small medical event can impact investment plan. So review this part also. Since you are married, cover both.

» Wealth Behaviour Mindset
You are already disciplined. Just keep these simple principles:

Invest without stopping

Review once a year

Avoid funds overlap

Follow asset allocation

Avoid reacting to media noise

This helps you reach long term milestones.

» Finally
You are on the right track. Only fine tuning and simplification is needed. Your discipline is visible. Your portfolio will grow well with structure, patience and periodic review. Use the Rs 6 lakh with STP approach. And continue SIP with rationalised categories.

With time and consistency, wealth creation becomes effortless and peaceful. You just need to stay committed and avoid overthinking during market movements.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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