Section VI: Income Tax and Your Financial Planning

• Ques: Keep your borrowing cost low through secured loans
• Ans: Key points:
  • First of all make a budget of expense and fund flow statement for next six months at least, then priortize the expenses and payouts including debts.
  • Follow the budget for future financial control and learn borrowing responsibility to avoid being called defaulter hence closing the door of financial market for yourself.
  • Take the relatives and friends financial help to pay high cost debt first.
  • Take low cost, easy payment based secured loans i.e. loan against LIC policy or fixed deposit or NSC @ 8-11% loan against shares or loan against property @ 13% in place of high personal loans @21% or credit card debt@ 36%.
  • Try to work extra hours and generate more funds till you pay the debt.
  • Sell the assets which are expensive to maintain, get cash and pay the debt. For example, shares, old car, jewellery, art effects which can be bought later.
  • One can take the help of finance professional or counselor.