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Ramalingam Kalirajan |9255 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jun 05, 2025

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 - Jun 01, 2025

HELLO SIR, My salary is 1.5 lakh after the PF deduction it gets 1.35 lakh. In which house rent is 20k and other house expenses total is 65000. The remaining my salary amount is 70k I have 5 Active loans of total 15 lakhs Every month the total EMI of this 5 loans are about 92k. I have 7 active credit cards , the total outstanding amount is 7.5 lakh. I am currently paying minimum EMI amount for 6 credit card. As of I have a lot of shortage, so I take that amount back after paying it. And another one card I am paying emi amount of 6k without taking it back. And I have a outstanding of 9 lakh in finance from 3 person, they require interest in every month until I pay them fully. From each of them I have taken 3 lakhs so total is 9 lakh. The required interest every month is 29k total. I also have to give my friends 1 lakh total. So I have total outstanding amount of around 32 lakhs. So I have to pay the loan emi amount of 92k + the finance Interest amount 29k + the credit card minimum bill interest and charges without deducting the original amount of credit, as I am taking it back to pay the others is around 25k. My salary = 1.35 lakh -65k (house expenses)- 92k - 29k - 25k So total shortage is around -80k to pay the monthly payment. I have asked my family to help, but nobody is willing to help me. What to do sir . Please help as soon as possible.

Ans: Assessing Your Current Financial Position
You earn Rs. 1.35 lakh per month. That’s your only inflow.

Your monthly expenses are Rs. 65,000. That’s almost half your income.

Your total debt outstanding is Rs. 32 lakh. That includes loans, cards, and private borrowings.

Monthly liability payments exceed Rs. 1.46 lakh. This includes EMIs, card payments, and finance interest.

You are facing a monthly shortfall of around Rs. 80,000. This is alarming.

Family is not supporting. That adds emotional burden too.

You are stuck in a debt trap. A bold, structured action plan is needed.

Step-by-Step Emergency Strategy
1. Classify the Debt

Break your debt into 3 groups.

Group A: Personal loans and formal EMIs – Rs. 15 lakh

Group B: Credit cards – Rs. 7.5 lakh

Group C: Private borrowings from individuals – Rs. 9 lakh

You are paying interest without reducing the principal in Group B and C.

This structure will help in planning repayment in right order.

2. Immediately Stop Using Credit Cards

Using credit again after paying minimum is worsening your debt.

This creates a loop of fresh interest every month.

Cut cards physically. Stop all discretionary expenses.

Do not reuse paid limits. Consider it locked.

3. Consolidate Your Debt into One Loan

Approach your salary bank for a personal loan.

Target amount: Rs. 20 to 25 lakh.

Use this to settle credit cards and private borrowings.

Interest on personal loan is lower than card finance or private loan.

Ask for 5 years tenure to reduce EMI.

4. Reduce Monthly Fixed Outflow

Ask bank for loan restructuring on existing loans.

Seek longer tenure to lower EMI burden.

Include private lenders in mutual settlement discussions.

Negotiate lump-sum payment to reduce principal.

Inform them you are unable to sustain interest-only model.

5. Approach a Certified Credit Counsellor

Contact a certified credit counsellor or a bank-supported DSA.

They help structure repayments officially.

They also negotiate with lenders and credit card companies.

No new credit should be applied now.

6. Use Emergency Measures to Raise Funds

Sell off any non-essential assets.

Sell gold jewellery or vehicle if possible.

Avoid emotional attachment now.

Temporary sacrifices now will give permanent relief.

Explore a part-time income source. Weekend or remote work.

Wife or other family members can explore earning options.

7. Evaluate Household Expenses

Reduce monthly expenses from Rs. 65,000 to Rs. 45,000.

Cut cable, OTT, dine-out, online orders, travel.

Every Rs. 1,000 saved is Rs. 1,000 earned now.

8. Build a Negotiation Plan for Private Loans

The Rs. 9 lakh loan is costing you Rs. 29,000 interest per month.

That’s Rs. 3.5 lakh per year just interest.

Offer a part payment of Rs. 3 lakh and ask them to close 1 account.

Keep record of all these settlements in writing.

Do not pay cash. Transfer digitally only.

9. Create a Weekly Cash Flow Plan

Track every rupee inflow and outflow.

Map your bank statement weekly.

Write down on paper.

Keep 2 columns: Essentials and Non-Essentials.

Non-essentials must be zero for next 12 months.

10. Do Not Panic or Go for Loan Apps

Avoid taking loans from unregulated apps or quick finance agents.

These will trap you in harassment and high penalty.

Trust only bank or RBI-licensed lenders.

Long-Term Financial Clean-Up Plan
1. After Consolidation, Start Credit Repair

Start repaying consolidated EMI on time for 12 months.

This will slowly improve CIBIL score.

Do not delay even a single EMI.

2. Slowly Close All Old Credit Cards

Once balance is zero, request card closure letter.

Don’t keep unused cards active.

Keep only one card for emergencies.

3. Rebuild Savings Slowly

Once debt stress is eased, start saving Rs. 5,000 monthly.

Put this in a liquid mutual fund through a regular plan.

Use only MFD services and not direct.

Certified financial planner can assist in fund tracking.

4. Stop Relying on Borrowings in Future

Build emergency fund of Rs. 1 lakh after debt resolution.

Avoid taking new loans unless necessary.

Learn budgeting monthly. Stay disciplined.

5. Create a Debt-Free Goal Timeline

Give yourself 5 years to become completely debt-free.

Celebrate each closed loan as a success.

Keep financial goal posters at home.

Remind yourself why you’re doing it.

Final Insights
You are under extreme financial pressure.

But you are taking the right step by asking help.

Take one step at a time.

Cut down lifestyle, negotiate settlements, raise income.

Consolidate high interest debts into one loan.

Rebuild savings only after all EMIs are managed.

Protect mental health during this tough phase.

Take support from your spouse if possible.

A 100% financial turnaround is possible in 3 to 5 years.

Focus on survival today, stability tomorrow and savings later.

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

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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