Hi, iam 47 years male, my monthly income is approx 1.5 lakhs but somehow i got into a financial crunch from last 4 years due to job problems & monthly expenses have risen to above 3.5 lac due to home, car, personal loan, credit card dues etc &...

Hi, iam 47 years male, my monthly income is approx 1.5 lakhs but somehow i got into a financial crunch from last 4 years due to job problems & monthly expenses have risen to above 3.5 lac due to home, car, personal loan, credit card dues etc & i'am unable to bear it all. Is there any financial institution from where i get a loan of say 40 lacs & clear all my dues & than pay 1 emi against this amount.

Ans: I understand the stress you must be feeling with your financial situation. It's crucial to address this effectively. Firstly, let's explore the possibility of consolidating your debts into a single loan to ease the burden.

Given your income and existing liabilities, securing a loan of 40 lakhs may be challenging without collateral. However, you could consider options such as a loan against property (LAP) or a personal loan with a higher amount, provided you meet the lender's eligibility criteria.

Loan against property offers larger loan amounts with longer repayment tenures, leveraging the value of your property as security. On the other hand, a personal loan typically comes with shorter tenures and higher interest rates but may be more accessible without collateral.

Approaching financial institutions like banks or non-banking financial companies (NBFCs) that specialize in debt consolidation loans could be beneficial. They'll assess your financial profile, including your income, liabilities, and credit history, to determine your eligibility and the loan amount you qualify for.

Once approved, consolidating your debts into a single loan can simplify your repayment process, replacing multiple EMIs with a single, manageable installment. This could potentially lower your overall interest burden and provide breathing space to stabilize your finances.

However, it's essential to weigh the pros and cons carefully and ensure that the terms of the new loan align with your long-term financial goals. Seeking guidance from a Certified Financial Planner can help you navigate this process effectively, ensuring a strategic approach to debt management and financial planning.

Remember, addressing financial challenges requires patience and proactive steps. By taking control of your finances and seeking the right support, you can gradually work towards achieving stability and financial well-being.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are taking full responsibility. That’s a great step.

You are 26 years old. You have a monthly income of Rs.25,000.

You live in a rented room paying Rs.7,000 rent.

You are managing to pay EMIs regularly, which is good.

But high credit card usage and multiple small loans are affecting your credit score.

You want one big loan to repay all others and focus on one EMI.

Let’s explore your case in detail and build a solution that works for you.

Understanding Your Current Situation

Your monthly income is Rs.25,000.

You pay Rs.7,000 as room rent every month.

That leaves you with Rs.18,000 for EMI and other expenses.

You are managing your loan payments on time. That’s a good habit.

But your credit card has Rs.56,000 used out of Rs.70,000 limit.

That is almost 80% credit utilisation. That reduces your credit score.

You also have small loans of Rs.9,000, Rs.20,000 and Rs.32,000.

Your old business loan has Rs.38,000 outstanding now.

Total outstanding across all loans is around Rs.1.55 lakhs.

You are not defaulting. But multiple loans make it hard to get a new big loan.

Lenders see high utilisation and multiple active loans as risky.

Why Credit Score is Low Right Now

Credit cards should not be used beyond 30% of limit.

You are using 80% of your credit card limit.

That lowers your credit score sharply.

Multiple loans from different lenders also create negative image.

Even if you are paying on time, the system sees you as credit-hungry.

That stops you from getting a new loan.

Your Thought is Correct – One Loan is Better

One loan with single EMI is always better than 5 small loans.

It’s easier to manage.

It improves your credit score faster.

It reduces monthly confusion and mental pressure.

Also helps you plan savings better.

But Why You Are Not Getting a New Consolidation Loan Now

Banks are checking your credit score and seeing high card usage.

They are also seeing 5 open loans. That’s a red flag for them.

Even though total loan amount is not very high, lenders don’t see it that way.

Lenders want to give loan to people who look stable, not stressed.

What You Can Do Now Step-by-Step

Let us go step-by-step in your case. These are realistic and practical.

Step 1: Stop Using Your Credit Card for Now

Use only debit card or cash. Avoid any credit card purchases now.

Every new swipe will increase your credit usage and lower your score further.

Try not to spend from your credit card until it is fully paid.

Step 2: Pay Off the Smallest Loans First

You have 3 small loans — Rs.9,000, Rs.20,000, and Rs.32,000.

Focus on closing Rs.9,000 loan first.

Then go for Rs.20,000.

Then the Rs.32,000 one.

Every loan closure improves your score.

Even closing one small loan increases your chance to get a bigger loan.

It will also reduce your monthly EMI burden.

Step 3: Don’t Miss Any EMI Ever

Even one missed EMI can delay your score improvement by 6 months.

Always pay loan EMIs before due date.

If needed, cut down on other personal expenses like dining, mobile recharge, or travel.

Your priority is loan EMI first.

Step 4: Talk to a Certified Financial Planner or MFD for Debt Counselling

You may think CFPs are only for rich people. But they help everyone.

A good Certified Financial Planner can analyse your loans and build a simple repayment plan.

They can also connect you to NBFCs who give consolidation loans.

CFPs give emotional support too, not just financial advice.

Step 5: Use EMI Moratorium Only if Things Get Very Hard

You can request for loan restructuring or moratorium if things go out of hand.

But only use this option as last resort.

Moratorium affects your credit report for 6 to 12 months.

It should not be the first choice.

Step 6: Don’t Apply for Any More Loans Now

Every new loan application creates a hard enquiry.

Too many enquiries in credit report will hurt you more.

For now, focus on reducing your loans. Don’t try for a new one.

Wait for at least 3 months of regular payment and credit card discipline.

Step 7: Try for a Salary Advance from Employer or HR

If you work in a company, try asking for a salary advance.

Some employers give interest-free salary advance for emergencies.

That can help you close a small loan without affecting credit score.

Step 8: Start Building a Simple Emergency Fund

After clearing 1 or 2 loans, begin saving Rs.1,000 every month.

Build emergency fund slowly. You don’t need a big amount in one shot.

Emergency fund stops you from taking new loans for small issues.

This is a very important part of financial peace.

Step 9: Consider a Peer-to-Peer Lending Platform

Some peer-to-peer (P2P) platforms give small consolidation loans.

They are not banks, but they offer structured loans.

Their rules are less strict than banks.

But always check the legal approval and RBI registration before using them.

Step 10: Start Improving Your Credit Score Bit by Bit

Credit score is like a school report card. You must build it year by year.

Close small loans.

Don’t spend more than Rs.10,000 on your credit card until score improves.

If you pay full dues and stay below 30% limit, score improves fast.

Check score once in 6 months using platforms like CIBIL or Experian.

Why Not Take Loan from Friends or Family

You may think to borrow from friends. But that creates emotional pressure.

Family support is good, but should not be taken for granted.

Always try to repay every personal loan with respect.

If you borrow, write it on paper and keep track.

Avoid Payday Apps and Fast Loan Apps

Never use mobile apps that give 1-hour loan with 40% interest.

These apps are illegal and harmful.

They threaten, misuse data, and insult borrowers.

Always stay with legal lenders, NBFCs or banks.

Avoid Real Estate or Gold Loan to Pay Off Debts

Don’t pledge gold for these small loans.

Don’t try to invest in land or property when you are under loan pressure.

Real estate is not the answer to solve loan problems.

Final Insights

You are thinking in the right direction. That is a strength.

Trying to close all loans with one EMI is a smart plan.

But you need to first improve your credit score before getting that big loan.

Pay off smallest loans one by one. It is the fastest way to build score.

Use credit card only after full payment. Never more than 30% of limit.

Avoid taking new loans or applying for loans again and again.

Focus on repaying old ones and then apply after 6 months.

Build a small saving habit also once 1 or 2 loans are closed.

Don’t worry too much. Many have come out of this same situation.

With some discipline, you can also be debt-free in 12 to 18 months.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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