Assess Your Debt
The first step is a clear picture of what you owe. Write down each loan’s outstanding balance, interest rate, monthly EMI and remaining tenure. Don’t forget credit‑card balances or small consumer loans – even a few instalments can add up.
Compare EMIs to Income
If your take‑home salary is ₹55,000 and your total EMIs amount to ₹24,000, only ₹31,000 remains for groceries, bills and savings. Seeing the numbers side‑by‑side makes the pressure tangible and helps you decide where to focus.
Prioritise Payments
Continue making the required instalments on all debts. When you have extra cash, direct it to the loan with the highest interest rate. Once that is cleared, move to the next one. Check each lender’s terms for early‑repayment fees before making a part‑payment.
Build an Emergency Cushion
Without savings, a broken appliance or a medical bill can push you back into credit‑card debt. Even a modest reserve – say ₹1,000 a month – can grow into a useful safety net over time. Start small and increase the amount as your budget allows.
Talk to Lenders Early
If you anticipate missing an EMI, reach out to the bank or finance company before the due date. Options such as extending the repayment period can lower the monthly amount, though they may increase total interest. Be cautious with debt‑consolidation offers; they help only if the overall cost is reasonable.
Watch for Progress
The first sign of improvement may simply be finishing a month without borrowing again. Once that becomes routine, you can allocate more funds to debt repayment and savings.
*Disclaimer: The views expressed are those of the author and not of Moneycontrol.com. Readers should consult certified experts before making financial decisions.*