Hello Sir, Due to my sister marriage and health issues in the family I have accumulated a very high debt of 56 lakhs including credit cards and personal loans. I am a pvt employee with 14 lacs per annum salary package, monthly its approximately 1 lac take home. Please suggest a way out to ease my burden and come out of this mess.
Ans: Here are some steps that will help-
1. Create a Budget: Make a detailed budget to track your income and expenses. Cut unnecessary expenses and prioritize debt payments.
2. Emergency Fund: Set aside a small portion of your income each month to build an emergency fund. This will prevent you from accumulating more debt in case of unexpected expenses.
3. Debt Snowball or Avalanche: Consider using either the debt snowball or avalanche method to tackle your debts. In the snowball method, pay off the smallest debt first and then move on to the next one. In the avalanche method, focus on the debt with the highest interest rate.
4. Reach out to the lenders to negotiate the lending rate based on your good payment history.
6. Debt Consolidation: If possible, explore the option of consolidating your debts into a single loan with a lower interest rate.
8. Avoid New Debt especially high-interest loans and credit cards.