Facing 16 separate loans totaling ₹70 lakhs can feel overwhelming. But with a clear strategy, discipline, and the right tools, you can conquer this mountain of debt in a matter of years—not decades. This guide, rooted in current Indian market conditions, lays out step‑by‑step actions: from understanding your loans and consolidating smartly, to budgeting rigorously, boosting income, and leveraging government schemes. Read on to take control of your financial future.
1. Take Stock: Know Exactly What You Owe
Why it matters: You can’t beat what you can’t measure. Before you can create a payoff plan, list every single debt:
| Loan No. | Type of Loan | Outstanding Balance | Interest Rate | EMI/Payment | Lender |
| 1 | Personal Loan | ₹5,00,000 | 11.25% p.a. | ₹11,000 | HDFC Bank |
| 2 | Credit Card A | ₹2,50,000 | 36% p.a. | ₹10,000 | SBI Card |
| … | … | … | … | … | … |
| 16 | Education Loan | ₹3,00,000 | 8.50% p.a. | ₹6,000 | Bank of India |
| Total | ₹70,00,000 |
Action: Pull your loan statements today and complete this spreadsheet. Record:
- Outstanding balances
- Annual interest rates
- EMI or minimum payment amounts
- Remaining tenure
- Special features (prepayment penalty, moratorium end, etc.)
2. Choose a Payoff Method: Avalanche vs. Snowball
Two proven repayment strategies help you allocate extra cash efficiently:
| Method | Description | Best for… |
| Avalanche | Pay minimum on all, but throw any extra funds at the loan with the highest interest rate first. | Minimizing total interest costs. |
| Snowball | Pay minimums on all, but direct extra funds toward the smallest balance first, then roll over payments to the next smallest. | Motivation through quick “wins.” |
Example: With a ₹2,000 monthly surplus:
- Avalanche: You’d accelerate repayment on the 36% credit card debt, saving thousands in interest.
- Snowball: You’d clear a ₹50,000 education loan in, say, 8 months, then use that momentum on bigger loans.
Action: Pick one method today. Schedule a weekly or monthly review to redirect any surplus into your chosen target debt.
3. Consolidate and Refinance: Simplify and Save
Dealing with 16 creditors is administratively draining—and usually more expensive. Consolidating high‑rate debts into a single, lower‑rate loan can slash your EMI burden and free mental bandwidth.
3.1 Personal Loan for Debt Consolidation
Several banks and NBFCs now offer dedicated consolidation loans. Typical rates as of June 2025:
- Bajaj Finserv: 12.99% p.a.
- HDFC Bank: 11.25–21.50% p.a.
- Axis Bank: 11.25–22% p.a.
- SMFG India Credit: from 13% p.a. for up to ₹30 lakhs
Pros:
- One EMI, one tenor, one interest rate.
- Possible lower blended rate than your highest‑rate debts.
Cons:
- Upfront fees (processing charges 1–2% of loan).
- Requires good credit score and stable income.
3.2 Balance Transfer on Credit Cards
If most of your costly debt lies in credit cards, a balance transfer (BT) to a new card or loan can be advantageous:
- IDFC First Bank: Rates starting at 9.99% p.a. on BTs.
- ICICI Bank: 10.85% p.a. on balance transfers, tenures up to 60 months.
- BankBazaar: BT rates from 10.50% p.a., but watch transfer fees.
Action: Calculate if the EMI and fees on a consolidation loan or BT package beat the sum of your current EMIs plus interest. If yes, apply within 48 hours—rates and offers can change quickly.
4. Harness Government and RBI Schemes
4.1 RBI Rate Cuts and Lending EBR
In June 2025, the RBI cut its repo rate by 50 bps to 6.75% and CRR by 100 bps, prompting banks like SBI to lower their External Benchmark Rate (EBR) to 8.15% and reduce lending rates by 0.50%.
- Home loans: now 7.50–8.45% for well‑scored customers.
- Other personal loans: top banks have trimmed rates by 0.25–0.50% .
4.2 State Debt Relief Schemes (DRS)
Several states offer Debt Relief Schemes under RBI guidelines, including deferred payments, reduced rates, or partial waivers for target borrower segments. If you meet criteria (e.g., small business owners, agricultural loans), contact your lender’s branch for details.
Action:
- Speak with each lender about lowering your rate in light of RBI cuts.
- Investigate any state‑level DRS that might apply to your loans.
- If you qualify, submit required documents (income proof, KYC) ASAP—schemes often have limited windows.
5. Slash Your Budget: Free Up Extra Cash
An aggressive repayment plan demands sacrifice—at least temporarily. Use a razor‑tight budget to funnel every possible rupee toward debt.
5.1 Emergency Cash Buffer
Maintain 3 months of living expenses in a high‑yield savings account (3.50% APY under ₹5 lakh at HDFC Bank; 7.00% for ₹5 lakh+ at IDFC First) . Once that’s in place, deploy extra cash toward loans rather than sitting idle.
5.2 The 80/20 Debt‑First Rule
Allocate:
- 20% of net income to essential expenses
- 80% of net income to debt repayment and mandatory bills
On a ₹1,00,000 monthly take‑home, that’s ₹80,000 toward EMIs, accelerating payoff massively.
5.3 Cut Discretionary Costs
- Dining and entertainment: Limit to ₹5,000/month.
- Subscriptions: Cancel underused streaming or magazine plans.
- Travel: Opt for public transport or car‑pooling when possible.
Action: Track every expense for 30 days. Identify the top three categories where you can cut 30–50%. Redirect that savings straight into your highest‑priority loan.
6. Boost Income: Side Hustles and Extra Work
Even small side incomes can make a big dent in large debt.
| Option | Potential Monthly Income | Time Commitment |
| Freelance writing | ₹10,000–₹20,000 | 10–15 hours/week |
| Online tutoring | ₹8,000–₹15,000 | 8–12 hours/week |
| Rideshare/delivery | ₹7,000–₹12,000 | Flexible |
| Digital products (e‑books, courses) | ₹5,000+ | Initial heavy, then passive |
Action: Pick one gig aligned to your skills. Set a goal—e.g., ₹10,000/month—and build it systematically. Channel 100% of side‑gig earnings into loan repayment.
7. Automate and Leverage Windfalls
- Automate EMIs: Set standing instructions so payments never miss—and avoid penalties.
- Use bonuses and tax refunds: Funnel entire amounts towards the loan with the highest rate.
- Biweekly payments: Splitting your monthly EMI into half‑EMIs every two weeks creates an extra annual payment without much notice.
Action: Adjust your bank account on payday so that all surplus flows immediately into loan accounts.
8. Track Progress Visually and Stay Motivated
A debt‑free journey can be long—keep morale high:
- Debt thermometer: Mark each lakh paid off on a poster at home.
- Milestone rewards: Small treats (dinner out, short trip) at every ₹5 lakh milestone.
- Accountability partner: Share your plan with a friend or spouse; update them monthly.
Action: Create a simple chart showing remaining debt each month. Review it with fresh side‑gig income or budget cuts to see real progress.
9. Prepare for Life Events: Insurance and Safety Nets
While attacking debt, don’t ignore protection:
- Health insurance: Family floater plans ₹5–10 lakh cover cost ₹10,000–₹20,000/year.
- Term life cover: At least 10× your annual income, premium ~₹7,000–₹10,000/year for ₹30 lakh cover.
- Critical illness rider: Adds ₹2,000–₹3,000 premium for extra safety.
Proper insurance ensures one medical emergency won’t derail your entire repayment plan.
10. The Roadmap: A 24‑Month Payoff Plan
| Timeline | Key Actions | Target Debt Remaining |
| Months 1–3 | List debts, choose avalanche/snowball, set up spreadsheet, automate EMIs. | ₹60 lakhs |
| Months 4–6 | Secure consolidation loan or BT, slash budget (80/20 rule). | ₹50 lakhs |
| Months 7–12 | Ramp up side‑gig to ₹10K+/month, apply government schemes. | ₹35 lakhs |
| Year 2 Q1 | Funnel bonuses/tax refunds, refinance any remaining high‑rate debts. | ₹20 lakhs |
| Year 2 Q2 | Aggressively pay down last ₹20 lakhs, hitting final milestone. | ₹0 |
Adjust exact numbers to your income and expenses. The key is consistent overpayment—just ₹10,000 extra per month above minimums forks off nearly ₹2,40,000 in two years!
Conclusion: Freedom Is Within Reach
Paying off ₹70 lakhs across 16 loans demands grit, strategy, and discipline. By thoroughly understanding your debts, consolidating wisely, slashing expenses, boosting income, and leveraging government relief, you can clear this burden in about two years rather than decades. Start today: list your loans, pick your payoff method, and declutter your finances—then watch your debt balance fall each month. Financial freedom awaits!
Source : thepumumedia.com