Dealing with parents’ debt: I’m a 30-year-old married woman. Can I get a personal loan without my husband’s knowledge?

I am a 30-year-old married woman with two daughters, and I earn Rs 90,000 per month. I give my parents around Rs 20,000 to Rs 25,000 for their monthly expenses. My parents have a debt of around Rs 12 lakh and an income source of Rs 10 000 per month. Now it’s my responsibility to clear their debts. Can I take a personal loan which again makes my situation complicated by getting the approval from my husband? Or how can I make money to clear those debts?

Name withheld

Reply by Adhil Shetty, CEO of BankBazaar.com

Let us break this down into three parts. Your first step needs to be to evaluate how much you would be able to spend, save, and invest each month. Look at your regular expenses and add a 10% mark-up to them to make sure you have a little extra and don’t fall short in case of an emergency. With the rest of your income, set aside the monthly amount you give to your parents. The remaining funds are what you will have each month to take on additional liabilities and to invest.

The second is the outstanding loan. A personal loan of Rs 12 lakh at 12% interest to be repaid over 5 years would come to approximately Rs. 26,693 per month. If you decide to take a loan, this is the burden you will have to bear. Evaluate if this is something you can take up. While you will not require your spouse’s approval to take the loan, you may not want to do it without informing him. Family finances are closely intertwined, and surprises at the time of an emergency are best avoided. If you are unable to take the loan, consider liquidating some of the assets to prepay and close the loan.

Also read: ‘It is a burden, avoidable’: Ex-SBI chief Rajnish Kumar on credit card TCS for overseas travel

Also read: RBI to introduce regulatory framework for lending business, promises fair practices and data privacy

Also read: Unchanged Repo Rate: Here’s how RBI’s move will impact home loan borrowers’ EMI repayment strategies and FD investments

Finally, once you have your liabilities in place, calculate the amount you can invest every month and choose the right instrument. If you are looking at long-term investment and do not require short-term liquidity, consider ELSS funds. If you are looking at investing for the short term, look at debt options like recurring deposits. Remember, if you are investing in mutual funds, invest for the long term. Open different investment accounts for different milestones. For instance, if you are saving for your daughters’ education, open an account for each of them. Most importantly, do not mix tax and investments. Invest to earn returns and not to save tax. The instruments that save tax may not give you the returns you need in most cases.

Ultimately, it will be a good idea to discuss the specifics with a professional financial planner who would be able to give you more detailed advice based on your exact financial situation and goals.

(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.)