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Ramalingam Kalirajan  |5173 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 16, 2024

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 - Apr 14, 2024Hindi

Hi I am having more than 5 credit cards and Personal Loan along with a home loan..I am really facing problem to pay my dues and I have fallen in a debt trap. I am taking loan to pay off my another loan. I have no intention that I will not pay off my dues but on the other hand I am facing huge issue to pay off my debts, due to this even my Credit score and CIBIL is affecting. Kindly provide me a suggestion so that I can solve this issue without affecting my CIBIL.

Ans: Managing multiple loans and credit card debts can be overwhelming and lead to a debt trap, impacting your credit score and financial health. Here's a step-by-step plan to help you manage and eventually pay off your debts without further damaging your CIBIL score:

Assess Your Debts:

List down all your debts, including credit cards, personal loans, and home loans.
Note down the interest rates, outstanding amounts, and minimum monthly payments for each.
Create a Budget:

Make a realistic monthly budget to track your income and expenses.
Identify areas where you can cut expenses and allocate more funds towards debt repayment.
Prioritize Debts:

Prioritize debts with the highest interest rates to save on interest costs.
Continue making minimum payments on all debts to avoid penalties and further damaging your credit score.
Debt Consolidation:

Consider consolidating high-interest debts into a lower-interest loan or balance transfer credit card.
This can simplify payments and reduce overall interest costs, making it easier to manage.
Negotiate with Lenders:

Reach out to your lenders to negotiate lower interest rates or extended repayment terms.
Many lenders offer hardship programs or restructuring options to help borrowers in financial distress.
Increase Income:

Look for additional sources of income to boost your monthly cash flow.
This could be through a part-time job, freelancing, or selling unused items.
Financial Counseling:

Consider seeking professional financial counseling or debt management services.
They can provide personalized advice and strategies to manage and pay off your debts effectively.
Avoid Taking New Loans:

Stop taking new loans or using credit cards until you have paid off existing debts.
Focus on living within your means and building a savings buffer for emergencies.
Monitor Your Credit Score:

Regularly check your credit report to monitor your progress.
Ensure all information is accurate and dispute any errors to maintain a healthy credit score.
Stay Committed:

Stay committed to your debt repayment plan and avoid falling back into old habits.
Celebrate small victories along the way to stay motivated.
Remember, managing debt requires discipline, commitment, and patience. It may take time to get out of debt, but with a structured plan and determination, you can achieve financial freedom and improve your CIBIL score over time.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Ramalingam Kalirajan  |5173 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 02, 2024

Sir my monthly salary is 28000 and I took a personal loan of 5lacs last year and I have credit card also but with my daily expenses I couldn't pay the total emis and bills so I took some credit from cred application it's almost 3lacs and now I'm unable to pay any of them as my salary is very low to pay so many emis I can't stop thinking about all this I'm facing anxiety and depression due to debts. I want to come out of this debt and get clean from all this problem. I want to save money and live a normal life. I couldn't share it with anyone also. My father us retired and he couldn't help me.
Ans: I'm truly sorry to hear about the challenges you're facing with your debts, and I understand how overwhelming and stressful it can be. Please know that you're not alone, and there are steps you can take to work towards financial stability and peace of mind.

Assess Your Debts: Start by listing out all your debts, including personal loans, credit card dues, and any other outstanding amounts. Understanding the total amount owed and the interest rates associated with each debt is the first step towards managing them effectively.
Create a Budget: Evaluate your monthly income and expenses to create a realistic budget. Prioritize essential expenses such as food, rent, and utilities, and allocate any remaining funds towards debt repayment.
Communicate with Creditors: Reach out to your creditors to discuss your financial situation and explore options for repayment. They may be willing to negotiate a payment plan or offer assistance programs to help you manage your debts.
Explore Debt Consolidation: Consider consolidating your debts into a single loan with a lower interest rate, if possible. This can simplify your repayment process and potentially reduce the overall amount you owe.
Seek Professional Help: If you're feeling overwhelmed or unsure about how to proceed, consider seeking assistance from a financial counselor or debt management agency. They can provide guidance, support, and practical strategies for managing your debts and improving your financial situation.
Take Care of Your Mental Health: Remember to prioritize your mental health during this challenging time. Practice self-care techniques such as exercise, meditation, or talking to a trusted friend or therapist to help alleviate anxiety and depression associated with financial stress.
Lastly, please know that it's okay to ask for help, and reaching out for support is a positive step towards regaining control of your finances and your life. You have the strength and resilience to overcome these challenges, and with determination and perseverance, you can work towards a brighter financial future.

..Read more


Ramalingam Kalirajan  |5173 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 04, 2024

Asked by Anonymous - May 04, 2024Hindi
Dear Sir, I am a 31 year old married man.I am in a huge debt trap of multiple loans plus credit card mounting around 9 lakhs. I work in MNC company earning 70k per month. Please advise or suggest if I can come out of this.
Ans: I understand your concern about being in a debt trap, but there are steps you can take to address the situation and work towards financial stability:

Assess Your Debt: Start by listing out all your debts, including the outstanding amounts, interest rates, and minimum monthly payments. This will give you a clear picture of your financial situation.
Create a Budget: Develop a detailed budget that outlines your monthly income and expenses. Identify areas where you can cut back on spending to free up more money to put towards debt repayment.
Prioritize Debt Repayment: Focus on paying off high-interest debt first, such as credit card debt. Consider using the debt avalanche or debt snowball method to systematically tackle your debts.
Negotiate with Creditors: Reach out to your creditors to discuss repayment options. They may be willing to negotiate lower interest rates, waive fees, or offer a repayment plan that fits your budget.
Explore Debt Consolidation: Consolidating your debts into a single loan with a lower interest rate can make it easier to manage and potentially reduce your overall interest costs. However, be cautious and carefully evaluate the terms and fees associated with any consolidation offer.
Increase Your Income: Look for opportunities to increase your income, such as taking on a part-time job, freelancing, or seeking a higher-paying position within your company.
Seek Professional Help: If you're feeling overwhelmed or unsure about how to proceed, consider seeking assistance from a financial counselor or debt relief agency. They can provide guidance and support tailored to your specific situation.
Avoid Taking on New Debt: While you're working to pay off your existing debt, avoid taking on any new debt if possible. Stick to your budget and focus on living within your means.
It may take time and discipline, but with a solid plan and commitment to debt repayment, you can overcome your debt challenges and regain control of your finances. Remember to be patient with yourself and celebrate small victories along the way.

..Read more


Ramalingam Kalirajan  |5173 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 11, 2024

Hello Sir, My in hand salary is 98000 but loan EMIs and Credit Card bills are 1.75 lacs. I don't have have savings due to multiple medical issues in my family from the 3-4 years. Im heart patient as well. Can you please guide me the way to com out from my debts. Thanks
Ans: I appreciate your courage in sharing your situation. Managing financial stress, especially with health issues, is challenging. Let's create a practical plan to help you get out of debt and build a secure financial future.

Understanding Your Financial Situation
Monthly Income: Rs 98,000
Monthly Debt Obligations: Rs 1.75 lakhs
Savings: None due to medical expenses
Immediate Steps to Manage Debt
Assessing Your Debt
Total Debt: Calculate the total amount owed, including all loan EMIs and credit card bills.
Interest Rates: Identify the interest rates for each debt. Prioritize high-interest debts first.
Budgeting and Expense Management
Create a Budget: List all your essential monthly expenses (food, utilities, rent, etc.). Identify non-essential expenses that can be reduced or eliminated.
Track Spending: Use a notebook or an app to track every rupee spent. This will help you identify areas to cut costs.
Prioritizing Debt Repayment
High-Interest Debt First
Credit Cards: These often have the highest interest rates. Focus on paying more than the minimum due to reduce principal faster.
Personal Loans: Once high-interest debts are managed, focus on personal loans.
Debt Consolidation Options
Debt Consolidation Loan: Consider taking a personal loan to consolidate high-interest debts into a single loan with a lower interest rate.
Balance Transfer: Transfer your credit card balance to a card with a lower interest rate, if possible.
Negotiating with Creditors
Contact Creditors: Explain your financial situation to your creditors. Request lower interest rates or a temporary reduction in monthly payments.
Debt Settlement: If negotiation fails, consider debt settlement. This involves negotiating a lump sum payment that is less than the total amount owed.
Increasing Your Income
Exploring Additional Income Sources
Freelancing: Use skills like writing, graphic design, or tutoring to earn extra income. Platforms like Upwork and Freelancer can help.
Part-Time Jobs: Look for part-time work that fits your schedule. Delivery services, tutoring, or online customer support jobs can provide additional income.
Leveraging Existing Skills
Skill Enhancement: Invest time in enhancing skills that can increase your earning potential. Online courses on platforms like Coursera or Udemy can be helpful.
Networking: Connect with professionals in your field who can offer freelance opportunities or part-time work.
Managing Health and Finances
Health Insurance
Review Existing Policies: Ensure that you and your family have adequate health insurance coverage to reduce out-of-pocket medical expenses.
Government Schemes: Explore government health schemes that may offer assistance with medical costs.
Long-Term Financial Planning
Building an Emergency Fund
Start Small: Once debts are under control, start building an emergency fund. Aim for at least 3-6 months’ worth of living expenses.
Consistency: Contribute a small, consistent amount each month to this fund.
Investing for the Future
Mutual Funds: After stabilizing your finances, consider investing in mutual funds for long-term growth. Start with small SIPs (Systematic Investment Plans).
Professional Guidance: Consult a Certified Financial Planner to choose the right funds and investment strategy based on your risk profile and goals.
Addressing Emotional and Psychological Stress
Seeking Support
Family and Friends: Share your concerns with trusted family members or friends who can offer support and advice.
Counseling: Consider seeking help from a financial counselor or a therapist to manage stress and develop coping strategies.
Positive Mindset
Focus on Progress: Celebrate small milestones in your debt repayment journey. Each step brings you closer to financial freedom.
Stay Motivated: Remind yourself of your long-term goals, like owning a home or securing a stable financial future.
Exploring Government and NGO Assistance
Government Schemes
Debt Relief Programs: Research if there are any government debt relief programs available that you may qualify for.
Subsidies and Grants: Explore government subsidies or grants that can assist with medical expenses or other financial needs.
Non-Governmental Organizations
Financial Assistance: Some NGOs offer financial assistance or low-interest loans to individuals in financial distress.
Medical Aid: Look for NGOs that provide support for medical expenses.
Planning for a Sustainable Future
Education and Skill Development
Lifelong Learning: Continue learning and upgrading your skills to increase job opportunities and earning potential.
Certifications: Obtain certifications in your field to enhance your qualifications and career prospects.
Financial Literacy
Financial Education: Educate yourself on personal finance, budgeting, and investing. Books, online courses, and workshops can be valuable resources.
Smart Financial Decisions: Apply your knowledge to make informed financial decisions, avoiding high-interest debt and building savings.
Practical Tips for Financial Discipline
Avoiding High-Interest Debt
Credit Card Usage: Use credit cards sparingly and only if you can pay the full balance each month to avoid interest charges.
Loans: Avoid taking new loans unless absolutely necessary. Focus on repaying existing debts first.
Regular Financial Review
Monthly Check-In: Review your financial situation monthly. Adjust your budget and spending as needed to stay on track.
Annual Goals: Set annual financial goals and review your progress at the end of each year.
Final Insights
Getting out of debt while managing health issues is challenging, but it is possible with a structured plan and disciplined approach. Prioritize paying off high-interest debt first, consider debt consolidation, and explore additional income sources. Manage expenses carefully and seek professional advice to develop a sustainable financial strategy.

Invest in your skills and financial education to improve your long-term earning potential. Seek support from family, friends, and professional counselors to manage emotional stress. Utilize government schemes and NGO assistance to alleviate financial burdens.

Remember, every step you take towards financial stability is progress. Stay focused on your goals, maintain a positive mindset, and celebrate small achievements along the way. With determination and careful planning, you can overcome your financial challenges and build a secure and prosperous future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |5173 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 18, 2024

Asked by Anonymous - Jun 18, 2024Hindi
Sir my salary is 50k per month.Due to some unavoidable situations I had to take Bajaj finance,cred and loan on HDFC credit card.Emi for Bajaj finance is 12k,cred is 8k and HDFC credit card due amount is 145000...because of this iam not able to manage household expenses and I have a 3 years baby too...please let me know a better way to come out of these debts...
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,


..Read more

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.


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