I am a 53-year-old woman. I don't have any savings as I help my family. I have been paying EMI of Rs 31900 every month for more than 4 years. I took health insurance for myself for my sister's family and all other expenses. I take care of my mother. I earn a salary of Rs 80,000. Please help me repay this personal loan. I don't have any emergency fund.
Reply by Mayank Bhatnagar, Chief Operating Officer, FinEdge
It seems like you are stuck in a dangerous debt trap, and these tend to be quite challenging to get out of. It is very wise of you to realise the importance of paying off high-cost debt and reducing your interest burden. However, there is no magic bullet solution to your problem.
Getting out of this situation will require you to make certain tough personal choices, even if that means having a difficult conversation with your family members and letting them know that you need a 2–3-year window to consolidate your finances in order to avoid a potentially dangerous situation. You can all work together and meet midway for a solution, even if it involves a partial scale back in the amount you are contributing to their needs.
Fortunately, you are earning a sizeable salary, but your debt-to-income ratio of 40% needs to be cut back drastically. Instead of aiming to pay off a large chunk of your personal loans at once, keep paying back small sums of your personal loan every month until they become zero. And whatever you do, do not take up another one. Your family will need to pitch in to ensure the same.
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Once you have successfully tackled this issue, which may take a couple of years, you can proceed to build an emergency fund and save for your goals with the support of a qualified investing expert.
(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.)