Take appropriate measures

• Choose between the loans

If you have taken several loans but do not have the ability to repay all of them you need to make a choice regarding which one to pay first. In fact, most bankers are recommending this at the present moment. According to financial planner Milind Rai, if you have an auto loan and a car loan, it is better to continue paying your home loan since real estate prices do not go down immediately.

• Sell off less return generating assets

Also, in such times of distress you should consider selling off assets like car. You should also look into the investments you have made to find out if they are generating enough returns. In case there is an asset that is not giving as much return as the interest rate you are paying on the loan, it is wiser to liquidate that asset. You can also think of switching asset classes such as shifting from an equity growth plan to equity dividend plan.

Most financial planners say that your equated monthly instalment (EMI) at any time should not exceed 40 percent of your income except in certain cases when it can go up to a maximum of 50 percent.