Archive · 25 Sep 2026
Five Ways to Escape EMI Debt Trap and Rebuild Finances
EMIs let people pay for something in smaller monthly amounts.
But having too many EMIs can leave too little money for savings and emergencies.
First, write down every loan payment and compare the total with your monthly income.
Pay extra toward the loan charging the highest interest.
Avoid taking new loans for things you do not really need.
Paying credit-card bills in full can help stop debt from growing.
Automatic payments can prevent missed dues and extra costs.
If payments become difficult, talk to the lender early and consider consolidation only if it truly costs less.
Calculate total monthly EMIs and compare them with take-home income; one expert considers debt above 40% of income over-leveraged.
Prioritise prepaying the highest-interest loan after checking applicable prepayment charges.
Pause new credit, avoid instalments for discretionary purchases, and pay credit-card balances in full.
Automate repayments and contact lenders early about restructuring, tenure extensions, or other solutions.
Consider debt consolidation only when it genuinely lowers total borrowing costs after fees and charges.
- Who
- Borrowers managing multiple EMIs, with advice from Raj P Narayanam, Vijendra Singh Sekhawat, and Adhil Shetty.
- What
- Guidance on assessing, reducing, and preventing excessive EMI-related debt.
- When
- The advice applies when borrowers are managing multiple instalments or first notice repayment stress.
- Where
- The article addresses personal finances and interactions with lenders; no specific location is given.
- Why
- Multiple EMIs can consume a large share of income, limiting savings, emergency funds, and other financial obligations.
- Debt assessment
- Add every active EMI and compare the total with monthly take-home income.
- 40% threshold
- Raj P Narayanam said that if EMIs exceed 40% of take-home income, the borrower is over-leveraged.
- Repayment priority
- Use available surplus to prepay the highest-interest loan first, after checking prepayment charges.
- Credit cards
- Pay the full outstanding balance every month and avoid converting fresh discretionary purchases into instalments.
- Repayment discipline
- Automating debt repayments can help prevent missed dues and additional expenses.
- Lender contact
- Borrowers facing difficulty should contact lenders early to discuss restructuring or tenure extensions.
- Debt consolidation
- Consolidation should be used only if the new loan lowers total borrowing costs after fees and charges.