‘₹3.3 lakh EMI on ₹2 lakh salary’: Advisor warns of rising ‘fintech debt trap’ among earners 

A striking example shared by SEBI-registered investment advisor Abhishek Kumar is sparking fresh conversations about India’s growing personal debt problem — especially among salaried professionals relying heavily on digital lending platforms. 

In a recent LinkedIn post, Kumar described a real financial situation in which an individual earning ₹2 lakh a month is paying ₹3.3 lakh in monthly EMIs, effectively spending ₹1.3 lakh more than their income every month. 

According to the advisor, such cases are no longer rare. 

“This isn’t a hypothetical,” Kumar wrote, adding that during his 15 years as an investment adviser, he has repeatedly seen people who “look rich” on the surface but are actually drowning in multiple loans, particularly from fintech lending apps. 

Hidden cost of ‘looking rich’ 

The case highlights a broader issue emerging in India’s urban middle class—easy access to digital credit combined with social pressure to maintain a certain lifestyle. 

Kumar described the situation bluntly: when someone pays significantly more in EMIs than they earn, they are not just financially stressed but effectively in a “financial ICU”. 

Even when borrowers receive a financial windfall, repairing the situation can be difficult. In the example Kumar shared, the borrower was expecting ₹18 lakh from chit funds, but a damaged credit score prevented them from consolidating loans into a cheaper, single borrowing option. 

A five-step “battle plan” to escape debt 

Kumar proposed a structured strategy to stabilise such a financial crisis, focusing first on improving cash flow rather than chasing lower interest rates. 

1. Clear the smallest loans first: The first step involves using about ₹5 lakh from the incoming funds to eliminate six to seven small loans. Kumar calls these “mosquito loans” — numerous small debts that collectively create psychological and financial pressure. 

Removing them reduces the number of active liabilities and simplifies repayment. 

2. Reduce the EMI burden quickly: Paying off these smaller loans can cut monthly EMIs by roughly ₹85,000, reducing the total EMI from ₹3.3 lakh to around ₹2.5 lakh. That change alone can create breathing room in monthly finances. 

3. Exit the fintech loan trap: The next priority is clearing high-interest digital lending apps such as EarlySalary and Krazeebee, which Kumar says are designed to keep borrowers cycling through repeated borrowing. 

These loans often carry high interest rates and frequent repayment schedules, making them particularly stressful for borrowers. 

4. Attack one large bank loan: When the remaining ₹13 lakh from the windfall arrives, Kumar advises borrowers to fully close one large loan with the biggest EMI, rather than spreading payments across multiple debts. 

Eliminating a major loan can significantly improve a borrower’s debt-to-income ratio, making future refinancing or restructuring easier. 

5. Close the credit lines completely: Finally, Kumar stresses that borrowers should obtain a No Objection Certificate (NOC) from lenders and formally close those credit accounts. 

Leaving unused credit limits open increases the temptation to borrow again during financially tight months. 

A behavioural problem, not just a math problem 

Beyond calculations, Kumar argues that debt management ultimately comes down to behaviour. “Debt isn’t just a math problem; it’s a behaviour problem,” he wrote. 

Financial planners increasingly warn that easy digital lending, buy-now-pay-later services, and instant loan apps are changing borrowing habits in India, making it easier for salaried professionals to accumulate multiple small loans without fully understanding the long-term impact.