Credit Counselling for Individuals: Getting Your Debt Back on Track

Many households take on credit one product at a time: a home loan, a car loan, two credit cards, a personal loan and a "buy now, pay later" plan. Each looks manageable alone. Together, they can take over the monthly budget. Credit counselling is a structured way to step back and fix that.

Warning signs

Step 1: Map everything

List every loan and card, with its outstanding amount, interest rate, EMI and remaining tenure. Then download your free credit report from the credit bureaus (CIBIL, Experian, Equifax, CRIF High Mark). Check for errors, unknown accounts or wrongly reported defaults, and raise disputes for any you find.

Step 2: Prioritise

• Clear high-cost unsecured debt first, such as credit card balances and app-based loans.
• Protect secured loans linked to assets you need, like your home or vehicle.
• Keep an emergency buffer, even a small one, so new debt isn't needed for every surprise.

Step 3: Restructure sensibly

• Consolidate: replace expensive debt with a cheaper secured option, such as a loan against mutual funds, securities or gold, if you have suitable assets.
• Talk to your lender early: many lenders can offer a longer tenure, a revised EMI or a short moratorium for genuine hardship. They are more flexible before a default than after.
• Avoid "debt settlement" shortcuts: settling for less than you owe is reported as "settled" and can hurt your credit score for years.

Step 4: Rebuild your credit score

• Pay every EMI and card bill on time. Automate the payments where possible.
• Keep your credit card use well below its limit.
• Avoid applying for several loans in a short period.

Know your rights

RBI's Fair Practices Code limits how lenders and recovery agents may contact you, and bans harassment. If you have a complaint, approach the lender's grievance desk first, then the RBI Integrated Ombudsman if it isn't resolved within 30 days.

SERNET offers credit counselling to help you review your debts and plan the next steps. Any new loan is subject to the lender's own assessment and approval.