Carrying ₹10 lakhs of debt on a monthly salary of just ₹18,000 can feel like climbing Everest in flip‑flops. Yet, millions of Indians face similar pressure: household debt has surged to about 42.1% of GDP, driven by easy credit and rising living costs. At the same time, household savings have fallen to 18.1% of GDP, forcing more families to rely on loans for everyday expenses .
Personal‑loan interest rates range widely—from 10% to as high as 44% p.a.—depending on your credit score and lender . Add credit‑card dues at 42–52% p.a., and a ₹10 lakh debt can spiral beyond your control if left unchecked. But recovery isn’t impossible. With clear steps, discipline, and a long‑term mindset, you can claw your way back to financial health.
1. Face the Reality: Map Your Full Debt Picture
Before you can conquer debt, you need a clear battlefield map.
- List Every Liability: Home or personal loans, credit cards, buy‑now‑pay‑later, or any informal borrowings.
- Record Balances & Rates: For each, note the outstanding principal, interest rate, minimum monthly due, and tenor.
- Calculate Total Monthly Dues: Sum up all EMIs and minimum payments to see how much of your ₹18K salary is already spoken for.
| Debt Type | Outstanding (₹) | Rate (% p.a.) | Minimum Due (₹) |
| Personal Loan | 4,00,000 | 12–16% | 12,000 |
| Credit‑Card Dues | 2,50,000 | 42–52% | 15,000 |
| Buy‑Now‑Pay‑Later | 1,00,000 | 24% | 5,000 |
| Education Loan | 2,50,000 | 10–14% | 7,000 |
| Total | 10,00,000 | — | 39,000 |
Reality Check: You’re already ₹21,000 short each month (₹39K dues − ₹18K salary). Mapping this gap is painful but crucial.
2. Stop the Bleeding: Halt New Borrowing Immediately
Taking fresh loans to cover old ones is a one‑way ticket to a debt spiral.
- Uninstall Loan Apps: Remove any quick‑cash apps that tempt you with “instant approval.”
- Freeze Your Credit Cards: Temporarily block them or switch to debit‑only mode.
- Announce a “No‑New‑Debt” Rule: Tell family or friends you won’t borrow again until you’ve cleared at least one major liability.
Why It Matters: Pausing new debt stops the balance from growing and gives you a fighting chance to focus on existing obligations.
3. Build a Bare‑Bones Budget: Every Rupee Counts
With only ₹18K coming in, ruthless budgeting is non‑negotiable.
- Zero‑Based Budgeting: Assign every rupee a job—essentials, debt, emergency fund, discretionary.
- Track Expenses Religiously: Use free apps like Money View or a simple Excel sheet to record every expense.
- Slash Non‑Essentials: Cut OTT subscriptions, dining out, and impulse buys. Even saving ₹1,000 a month frees up ₹12,000 a year towards debt.
| Category | Allocation (%) | Amount (₹) |
| Essentials | 50% | 9,000 |
| Debt Payments | 40% | 7,200 |
| Emergency Fund | 5% | 900 |
| Discretionary | 5% | 900 |
Pro Tip: If essentials (rent, utilities, groceries) exceed 50%, negotiate rent with your landlord, switch to cheaper groceries, or share housing.
4. Create a Small Emergency Fund: Prevent Future Crises
Without any cushion, a single medical bill or unexpected repair can force you back into high‑cost borrowing.
- Target: ₹18,000 (1 month’s essentials) initially.
- Where to Park: Liquid debt mutual fund or high‑interest savings account yielding 4–6% p.a..
- How to Fund: Allocate that 5% in your budget (₹900/month) until you hit the target, then expand to 3 months of expenses.
Why It Helps: With a small buffer, you won’t need another app loan when the next emergency strikes.
5. Prioritize Debt Repayment: Avalanche vs. Snowball
Two proven methods can accelerate your debt payoff:
- Avalanche Method: Pay off the highest‑rate debt first (likely credit‑card dues at 42–52%). This minimizes total interest paid.
- Snowball Method: Clear the smallest debt balance first (e.g., a small BNPL or education loan) to build momentum and confidence.
Action Plan: Allocate any extra rupee to your chosen target debt while continuing minimum payments on others. Even an extra ₹2,000 per month slashes years off your repayment timeline.
6. Negotiate and Refinance: Lower Your Rates
Banks and NBFCs often prefer a negotiated settlement over defaults.
6.1 Personal‑Loan Top‑Up or Balance Transfer
- Top up your higher‑rate personal loan (12–16%) into a new loan at 9.99–10.85% p.a. from IDFC FIRST or ICICI.
- Transfer credit‑card balances into a 0–1.5% balance‑transfer offer for 3–6 months, paying a small fee instead of 42–52% p.a. interest.
6.2 One‑Time Settlements
- Propose paying 70–80% of the outstanding principal in one go to have the lender waive the rest of interest and penalty—banks often accept to cut losses.
6.3 Government Schemes & RBI Safeguards
- RBI’s tighter credit‑reporting rules (fortnightly updates) help lenders identify genuine low‑risk borrowers—use this to negotiate better terms.
- Under the Digital Lending Directions, 2025, lenders must disclose all fees and not harass you—file an RBI complaint if they do otherwise .
Tip: Always get negotiated terms in writing—email or signed letters avoid future disputes.
7. Boost Your Income: Every Extra Rupee Helps
On ₹18K, even small side gigs can move the needle.
- Freelancing & Tutoring: Use skills (writing, design, language tutoring) on platforms like Internshala or Chegg; earn ₹5,000–₹10,000 per month.
- Micro‑Entrepreneurship: Sell homemade goods, digital prints, or drop‑ship items via Meesho.
- Weekend/Part‑Time Jobs: Ridesharing, delivery, or customer‑service roles can add ₹3,000–₹7,000.
- Upskilling: Short online courses in data entry, digital marketing, or coding boost your full‑time salary prospects.
Motivation: An extra ₹8,000 a month cuts your debt gap by two‑thirds—and feels surprisingly achievable with dedicated effort.
8. Consolidate Debt via P2P or NBFCs
Peer‑to‑peer lending platforms and regulated NBFCs can offer lower rates than app‑based loans.
- P2P Platforms: Faircent or LenDenClub match you with investors at 12–18% p.a., versus 30–40% on apps.
- NBFC Loans: Some banks’ NBFC arms provide personal loans starting at 10.3% p.a. (SBI) or 11.25% (Axis).
Caution: Verify all charges up front and ensure you can commit to the EMI schedule—defaulting on another platform only compounds your problems.
9. Maintain the Right Mindset & Emotional Health
Debt recovery is as much psychological as financial.
- Set Small Milestones: Celebrate each ₹50,000 of debt cleared—small wins fuel motivation.
- Accountability Partner: Share your plan with a trusted friend or family member who checks in regularly.
- Stress‑Relief Rituals: Daily walks, meditation, or journaling keep anxiety at bay and decision‑making clear.
Remember: Many successful savers started in worse situations. Focus on progress, not perfection.
10. Build Long‑Term Habits: Prevent Future Debt
Once you tamed the ₹10 lakh monster, guard against relapse:
- Maintain an Emergency Fund: Grow it to 6 months’ expenses.
- Save & Invest via SIPs: Even ₹500/month in low‑cost equity or hybrid funds compounds powerfully over years.
- Live Below Your Means: Keep your budget lean and avoid lifestyle creep with each raise.
- Monitor Your Credit Score: Check CIBIL/Equifax quarterly; timely payments keep your score above 700 for best loan terms.
- Educate Yourself: Read personal‑finance books, blogs, or join community groups to stay motivated and informed.
Long‑Game Payoff: A disciplined saver on an ₹18K salary can become a homeowner or investor in a few years—debt no longer dictates your life.
Conclusion
Escaping ₹10 lakhs of debt on an ₹18,000 salary is undeniably tough—but entirely possible. By:
- Mapping your full debt picture,
- Halting new borrowing,
- Budgeting ruthlessly,
- Building a small emergency fund,
- Prioritizing high‑rate debts,
- Negotiating better terms,
- Boosting income,
- Consolidating smartly,
- Cultivating a resilient mindset, and
- Forming lasting habits,
you’ll transform your finances from crisis to control. Start today—each small step compounds into freedom from debt and the confidence to build real wealth.
Source : thepumumedia.com