kumar 36yrs,bussiness from 6 years, debt of total 68 lakhs, shop debt 32L, others-30L Includes-17L personal,13L-GOLD, Bank due-5.2L, monthly income 80K

Ans: Focus on the repayment of the loan.

Also prioritize hikes in your income through value addition, if possible.

If you get some lumpsum(bonus) or other payment try to prepay the loan so as to reduce interest outgo.

Ans: Hi P,

Please provide all details and your complete query.

Thanks
Janak Patel.

Ans: ? Understanding Your Present Financial Picture

You are 30 years old. That gives time to recover and build.

Net monthly income is Rs. 44,000. It will increase to Rs. 50,000 in 4 months.

You already maintain Rs. 80,000 as an emergency fund. This is a wise move.

You pay Rs. 8,083 EMI for a personal loan of Rs. 4 lakhs (29 out of 71 EMIs paid).

You have another personal loan of Rs. 1.97 lakhs at 18.99% (Rs. 10,661 EMI).

A two-year-old unpaid PL of Rs. 83,000 is still due.

Credit card dues stand at Rs. 1.55 lakhs.

You have two gold loans. One for Rs. 1.55 lakhs (Rs. 1,300/month) and another for Rs. 1.15 lakhs (Rs. 2,300/month).

SIP of Rs. 5,000/month and RD of Rs. 2,000/month are ongoing.

You are managing too many repayments together. Prioritisation is critical now.

? Assessing the Debt Structure

Total unsecured loans are very high. This includes credit card, personal loans, and old dues.

Credit card interest is the costliest. It can go up to 36% yearly.

Personal loans are at 13.5% and 18.99%, which are also expensive.

Gold loans have better interest rates but still need quick repayment.

Carrying so many loans together creates stress and affects credit score.

? Priority-Based Loan Repayment Strategy

First focus should be credit card outstanding of Rs. 1.55 lakhs.

Try to pay this off within 6 to 9 months.

Stop using credit cards till dues are cleared fully.

Convert outstanding to EMI if possible at lower interest.

Second focus should be the unpaid personal loan of Rs. 83,000.

Check if settlement or negotiation is possible for this older unpaid PL.

After that, give attention to the PL of Rs. 1.97 lakhs @18.99%.

Higher interest rate means higher cost.

Pay a bit extra if possible each month to reduce tenure.

Gold loans come next. They have emotional and financial value both.

Aim to close at least one gold loan in the next 6 months.

Keep clearing the costliest debts first.

? Budget Rework and Income Allocation

Total net income is Rs. 44,000. Soon to increase to Rs. 50,000.

You are paying about Rs. 21,000 in EMIs and interests.

That is almost 50% of current income. This is very risky.

Ideal EMI limit is 30% to 35% of income.

Avoid new loans until current loans are reduced.

Pause SIP of Rs. 5,000 and RD of Rs. 2,000 temporarily.

Restart them once debt burden reduces and cash flow improves.

This is not stopping your future. This is only delaying investing to focus on stability.

? Emergency Fund Is Useful But Limited

Rs. 80,000 is a good start as an emergency reserve.

But with your financial load, this may get exhausted fast.

Avoid touching it unless there is a real emergency.

Do not use this for loan closure unless in worst case.

Let this act as your real safety net.

? Managing Existing Mutual Fund Investments

You are investing Rs. 5,000 per month in mutual funds.

That is a good long-term habit. But pause it for next 6-9 months.

Use that money to repay credit card and old personal loan.

When you restart SIPs, prefer regular funds via an MFD with CFP guidance.

Direct plans may seem cheaper, but lack personalised advice.

Regular plans offer access to CFP’s strategy and discipline.

Avoid direct plans unless you have deep fund research experience.

? Problems with Direct Plans and Benefits of Regular Plans via CFP

Direct funds don’t give you a guide or strategy.

No hand-holding during market ups and downs.

You have to select and review funds by yourself.

No accountability, no behavioural coaching, and no rebalancing support.

With regular funds via CFP-led MFD, you get:

Professional fund selection based on goals

Portfolio rebalancing at right times

Human discipline during emotional market cycles

Review and performance analysis at intervals

Regular fund route is better for long-term growth and stability.

? Avoiding Common Traps in Financial Planning

Don’t take new loans to repay current loans.

Don’t borrow from friends or relatives for repayments.

Don’t try short-term trading in stock market to cover debts.

Don’t believe in “get-rich-quick” online tips or apps.

These traps lead to deeper financial problems.

? Dealing With Debt Without Panic

Speak with lenders if any EMI becomes difficult.

Ask for restructuring options or EMI holiday.

Do not let EMI bounce. That damages credit score deeply.

Stay committed to repaying slowly and steadily.

Good communication with lenders helps maintain trust.

? Managing Expenses Smartly

Prepare a simple expense tracker every month.

Categorise expenses as needs, wants, and avoidables.

Cut avoidables completely for now.

Reduce wants till debt pressure eases.

Use cash or UPI instead of credit cards for purchases.

Be mindful and intentional about every rupee spent.

? Improving Your Income Over Time

Your income will increase by Rs. 6,000 in four months.

Allocate the full raise towards repayment for 6 months.

After repaying costly debts, split the raise into savings and investing.

Upskilling can further increase earning potential.

Consider part-time skills or weekend projects if possible.

Your income growth is the best support for your financial journey.

? Gradual Comeback to Investments

Once credit card and costly loans are paid, resume SIPs.

Start again with Rs. 3,000 monthly, and increase gradually.

Add back RD once there is better surplus.

Choose mutual funds based on goals, not returns alone.

Avoid real estate or annuities as investment.

Keep goals like retirement, kids’ future, and wealth creation in mind.

Your investments should be structured with purpose and not emotion.

? Credit Score Protection Is Important

Too many loans and dues hurt your credit score.

Missed payments drop the score even faster.

Use one or two EMIs as buffer in account always.

Keep checking credit score once in 6 months.

Good credit score ensures lower interest in future loans.

? Avoid Index Funds and Focus on Actively Managed Mutual Funds

Index funds don’t beat the market, they only match it.

In volatile markets, index funds may fall more.

No active manager is controlling risk or timing.

They don’t suit investors who need personalised approach.

Active funds have potential to outperform.

Expert fund managers adjust the portfolio actively.

You get better downside protection in tough times.

Use actively managed funds aligned to your goal with CFP's help.

? Creating Your 360 Degree Roadmap

Short-Term Goal: Repay credit card, old PL, and at least one gold loan.

Mid-Term Goal: Close high-interest PLs and lower EMI burden.

Long-Term Goal: Build emergency fund to Rs. 1.5 lakhs.

Resume SIPs and increase investment slowly after stabilisation.

Review fund performance with certified professionals every 6 months.

Keep lifestyle in check even when income rises.

Each step forward strengthens your future.

? Finally

You are doing better than you think.

You already have savings, insurance, and emergency fund.

The problem is not income. The issue is too much parallel debt.

Give yourself 12 to 18 months to come out stronger.

Take one goal at a time. Stay focused and consistent.

Financial freedom starts with clarity and commitment.

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