Anyone else in their debt free journey?

[chas4all]

As the title says, are there other people working on getting rid of debt? It can be personal loans, education loans, home or car loans.

I was laid off from my job last year and realised how bad my situation is, so I started working on getting rid of it.

There’s no Indian community for debt free yet. I did join one but I don’t expect much traction as there aren’t many members.

 

[seabiscuit]

@chas4all Yup.. in the process of clearing HL. Hopefully in next 4 years.

 

[chas4all]

@seabiscuit If you don’t mind, can you mention the EMI range and how are you paying it off? Are you paying a fixed additional amount monthly or making a lump sum amount every few months? It’ll be interesting to know

 

[seabiscuit]

@chas4all Actual emi is 38K
Paying 50K
Plus planning to pay 3-4L end of every year. O/S amt is 42L.

 

[chas4all]

I was in a very bad place last June when I got laid off. EMIs worth 70k a month, rent of 38k/month, other expenses and the company didn’t even pay FnF (even today some of it is pending). It was a bad time because I had gotten married and had used up most savings (didn’t have much to begin with) and even had credit card bills on top. I felt the only way out was to get a new job and thankfully I got one. Unfortunately I got the worst manager ever, absolutely incompetent & stupid plus doing politics.

I did get help from family to clear some pending payments which could’ve gone NPA (Parents & in laws). At one point, SBI branch manager changed & the new called me and literally threatened me like those loan apps people. I told him that I’m not willfully defaulting and instead I want your help in restructuring the loan. He accepted my request but didn’t get it done so I had to go to the regional office & do it myself. Thankfully they were understanding and much more professional than this crass branch manager. I’m not even going to talk about the bad experience with loan apps, because you all know how it can be.

I went through so much tension and stress from job and debt that I couldn’t take it anymore.

I WILL FIX THIS!

It’s going to take me some time and possibly a few more stupid mistakes but I’ll do it, for the sake of my sanity and peace of mind.

 

[theendwasin70ad]

@chas4all It was tough getting laid off with home & car loans running and kid on the way. I think the jolt was needed to get me out of my slumber.

Post that have closed the loans on war-footing(Car loan in 1.5 years, Home loan in 10 years) & have maintained a 60%+ investment rate since couple of years

 

[chas4all]

@theendwasin70ad Wow! This is very cool. May you continue investing at that rate

 

[rae46]

@chas4all I had a bad customer payment stuck and first i didn't pay my suppliers, then borrowed from family , then maxed out my credit cards, like 6 of them between my wife and me

Then a saviour came, loan against mutual fund, it was at 9 percent and it totally cleared all high cost loans. And brought Shanti

Finally the payment from customer came and I paid off the loan. Total interest some 19000 over 3 months. Best money iv ever spent.

Now aiming to be completely loan free in next 3 months.

My mom says the day that happens, I'll take a new loan.

 

[seeker0]

@rae46 The last line

 

[chas4all]

@rae46 Hope you prove your mom wrong

 

[consolatio]

@chas4all I do have an education loan but I keep the EMI low for tax savings purposes. Not sure if paying more interest is worth the tax savings

 

[servadac]

@consolatio There is a cap towards the tax savings, as long as you are using it within the cap or are as close to it as possible your doing amazing. Being in debt isn't a bad concept as long as you don't go down the rabbit hole. Use the interest as tax saving methods is an amazing thing.

 

[chas4all]

@consolatio It’s not worth it! If you can clear the loan, just go for it. Instead you can invest in a home

 

[consolatio]

@chas4all My loan interest rate is 6.7%, while my investments will be at 12% on average. This is the reason why I pay less EMI and invest the rest.

I understand I'm paying more interest this way but then again, I claim it under tax deductions.

As for home loan, I am not sure which city I will end up in. That's why I can't invest that much right now.

 

[wstorm]

@chas4all Thanks for speaking up on this.

A lot of people suffering from debt aren't open about it.

Debt management is a critical part of personal finance.

This group should be as much about debt management as it is about investments.

To make this comment useful, I would like to mention 2 ways of debt repayment.

Snowball method - repay the smallest loan first (confidence-boosting method)

Avalanche method - repay the costliest loan first (mathematically correct method)

Look these up

 

[talk]

@chas4all I took HL of 15L last yr. I am going to be without job soon. I had intended to pre-pay more in this year but let's see.

 

[theloverofgod]

@chas4all 6 years in a job that never took a loan, even EMI.

I purchased things which I can afford, not on emi.

Even my scooter is on cash. Not owning a car but saving for it.

A few of my friends and family members own a car, bike and house And cry over emi

 

[rebecca1993]

@chas4all I hate loans but I had to take personal loan for family emergency and paying around 50k EMI per month, it will be closed in 3 years. I am having lot of pressure on loosing the job.

 

[chas4all]

@rebecca1993 Yeah I can understand!

 

[canadaghost]

@chas4all Good luck mate, all I can say is go ahead and read Dave Ramsey Total Money Makeover. It helped me years back in my 20's to have a debt free mindset. Got a car with cold hard cash a while back.