Tracking expenses and requirements

Keep a track of your ongoing and expected expenses. Prepare a budget/tracker reflecting your sources of income and outflows (in form of household expenses, social obligations, interest/EMI repayments and other borrowings, if any).

Trade off bad and good debt

Certain borrowing like credit card advances mount up fast even if the borrower misses a single installment. This kind of debt is classified as ‘bad debt'. On the other lateral, home loan, education loans are considered as good debts, as they increase in worth over a period of time. For instance, value of the house appreciates over a period of time and hence home loans are considered as good debt. Similarly, education is a value -addition to an individual and it helps in increasing individual's earnings capacity.

If you are under financial stress and your ability to repay loan is doubtful, it is advisable that you talk to your lender. It is likely that lender might restructure the loans, allow some wavier or may provide you time gap for repayment until your position is revived. If the repayment tenure is increased while restructuring the loan, the monthly EMI amount will drop.