Income - 30k Monthly rent -14k Emi is 32k with help of my family I am paying. I want to close all emi and pay small amount. Will it be a good option if I take a 1lakh loan for 35% and reduce the monthly emi burden
I have gold loan 1.9l Outside loan 65k O/s rent 28000 App loans total o/s 60k
I failed to repay few app loans for the past months, cibil got affected and too many loans. No bank is ready to offer any loan.
One offer I have is 1l in Bajaj at 35% interest.
What should I do and which way works best? Please help me
Ans: I understand your situation is challenging, and you need to find a way to manage your debts effectively. Here are a few steps to help you navigate this financial difficulty:
Assess Your Financial Situation
Income and Expenses:
Monthly Income: Rs. 30,000
Rent: Rs. 14,000
EMI: Rs. 32,000 (with family support)
Gold Loan: Rs. 1.9 lakh
Other Loans: Rs. 65,000
Outstanding Rent: Rs. 28,000
App Loans: Rs. 60,000
Immediate Steps to Take
Avoid High-Interest Loans:
Taking a Rs. 1 lakh loan at 35% interest from Bajaj is very costly and will worsen your financial burden.
Negotiate with Lenders:
Reach out to your existing lenders, explain your situation, and request a restructuring of your loans. They may offer lower EMIs, extended tenure, or a temporary moratorium.
Family Support:
Continue to seek help from family if possible. Consider discussing a temporary increase in their support to ease your immediate burden.
Sell Assets:
If you have any assets that can be sold without significant loss, consider doing so to repay high-interest loans first.
Medium-Term Strategies
Debt Consolidation:
Look for a debt consolidation plan with a lower interest rate. This might be hard given your current credit score, but some non-bank financial companies (NBFCs) offer such services.
Increase Income:
Look for additional income sources, such as part-time work, freelance jobs, or selling unused items.
Financial Counseling:
Consult a Certified Financial Planner (CFP) or a credit counseling agency. They can provide personalized advice and may help negotiate with creditors.
Long-Term Planning
Credit Score Repair:
Once your immediate financial crisis is managed, work on improving your credit score by paying all your dues on time and reducing outstanding debts.
Budgeting:
Create a strict budget to control expenses and prioritize debt repayment.
Final Insights
Taking a high-interest loan to manage current debt can lead to a debt trap. Focus on negotiating with current lenders, seeking family support, and avoiding any additional high-cost loans. Consider selling assets if possible and look for ways to increase your income. Consult a financial counselor for personalized assistance.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner,
www.holisticinvestment.in
