Struggling to pay high loan EMIs?:5 smart ways to fix your monthly budget

For many salaried individuals, a major chunk of their monthly income vanishes into EMIs (Equated Monthly Installments) the moment their salary is credited. The easy availability of digital loans, instant credit, and rising interest rates have made debt management a major challenge for household budgets. If high EMIs are ruining your monthly budget, you are not alone. Rohit Patwardhan, Chief Credit Officer at HDB Financial Services, suggests five practical strategies to regain control of your finances and secure your future. 1. Cut Down on Non-Essential Spending The first step to freeing up cash is to curb discretionary or unnecessary expenses. What to cut: Reduce frequent dining out, buying expensive gadgets, and impulsive online shopping. Check your subscriptions: Review and cancel unused or unnecessary subscriptions, such as multiple OTT platforms, music apps, gaming services, and gym memberships that you do not use regularly. 2. Pay Off Expensive Debt First Not all debts are equal. Credit card outstanding balances and personal loans carry the highest interest rates, making them the most expensive. Prioritize: Focus on paying off these high-interest debts first. Consolidate: If you are managing multiple small loans, consider consolidating them into a single, lower-interest personal or home-equity loan. This simplifies your payments and can lower your overall monthly outflow. 3. Build an Emergency Fund and Protect Your Credit Score A financial backup plan is essential to avoid falling into deeper debt during unexpected crises. Emergency Fund: Set aside a small portion of your income to build a safety net for medical emergencies or sudden job loss. Maintain a Good Credit Score: Always aim to keep your credit score above 750. Avoid late payments on bills and EMIs at all costs, as defaults can severely damage your credit profile and make future borrowing much more expensive. 4. Align Your EMIs with Your Salary Cycle Timing is everything when it comes to managing cash flow. Set Auto-Debit: Schedule your EMI and credit card payment dates to fall immediately after your monthly salary is credited. The Benefit: This ensures that your bills are paid automatically on time, helping you avoid late payment fees, protect your credit score, and prevent you from accidentally spending that money elsewhere. 5. Avoid Taking on New Debt To get out of a debt trap, you must stop adding to it. Review Regularly: Periodically review your existing loan portfolio to track your progress. Say No to New Credit: Avoid applying for new loans or signing up for new credit cards. Preventing “over-leveraging” (borrowing more than you can afford to pay back) is key to clearing your pending loans smoothly and ensuring long-term financial peace of mind.