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Five effective ways to stop your salary from disappearing into EMIs
- •List all your outstanding loans, credit card dues, interest rates, and tenures to understand how much of your take-home salary is consumed by EMIs.
- •Focus on clearing the costliest debt first, such as credit card balances carrying high interest rates, by using any extra money for part-payments.
- •Postpone non-essential purchases and avoid taking on new small instalments for shopping or gadgets to prevent stretching your budget further.
- •Build a small emergency reserve gradually every month, even starting with a modest amount, to avoid relying on credit cards for unexpected expenses.
- •Contact your lender early if you struggle to pay upcoming EMIs to discuss available options, but be cautious with expensive debt-consolidation offers.
Key Questions Answered
Start by listing every outstanding loan, including your balance, interest rate, monthly EMI, and remaining tenure, and do not exclude credit-card dues or small consumer loans. Compare the total EMI amount against your take-home salary to see how much of your income is already spoken for.
A credit-card balance can be significantly more expensive than a home or car loan, and paying only the minimum amount due allows interest to continuously add to the unpaid balance. Whenever you have extra money, allocate it toward reducing the debt with the highest interest rate first.
Contact your bank or finance company early to discuss available options for your loan. While a longer repayment period can reduce your monthly instalment, it may also increase the total interest paid over the life of the loan.
