Debt Management - 2016
A client’s tempo delivery business did not earn revenues as expected. He was not able to service the loan taken for the purchase of the tempo. Credit cards were used-up to the limit and dues were paid in instalments, which he missed many a times. This affected the CIBIL score. No bank would lend him any kind of personal loan to pay off the vehicle loan. The salary from the regular job was not enough. Being the only earning member of the family there was no other source of income and this made things worse. The family members were unaware of the situation. As often happens he started taking loans from friends to pay off the vehicle loan and credit card loans. When the friends demanded their money be paid, he sought other friends and acquaintances to pay off these loans. Worried and anxious on one such quest he landed at our doorstep; hoping we would lend him some money.
The client was advised to sell off the vehicle, though at a depreciated value and foreclose loan amount. His cash flows were scrutinised and all discretionary spends were stopped till such a time that the loans from friends were also paid off & expenses were equal to his income. Continuing with the austerity measures for a couple of more months resulted in surplus cash at end of each month. The cash surplus generated in these months and in the following months was further invested prudently in a systematic manner to earn better returns and have enough liquidity for emergencies. Thus, providing him with apt financial planning and consultation for a secure present. Alongside, credit card debts and loan repayments are an important aspect of financial planning for businesses and individuals. We recommend planning the expenses and repayments right from the initial stages. For more information kindly contact us.