Pune Man Shares How Debt Spiral Turned Rs 90,000 Salary Into Financial Struggle

A LinkedIn post has highlighted how a debt trap can build up quietly over time, not because of overspending, but due to unavoidable financial pressures and rising interest costs. Investment advisor Vivek wrote on LinkedIn that a 36-year-old operations manager from Pune earning Rs 90,000 a month is now Rs 15 lakh in debt, though he never made a reckless financial decision. He said that three years ago, the man was earning Rs 90,000 and spending Rs 82,000 on essentials, which was tight but workable.

He explained that the situation changed when the man's father needed urgent surgery costing Rs 5 lakh. Vivek said the man took a personal loan at 14% interest with an EMI of Rs 13,663 per month, and this decision pushed his monthly expenses higher than his income.

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He said that the man's monthly outgo went from Rs 82,000 to nearly Rs 96,000 against the same Rs 90,000 income, leaving him short every month.

Vivek said that to manage the shortfall, the man started using credit cards for groceries and fuel. He explained that within a year the credit card balance reached Rs 4 lakh, with a Rs 20,000 minimum payment at 40% interest. He added that the man then took a second loan of Rs 6 lakh to consolidate the debt, but due to a lower credit score, this loan came at 18% interest with an EMI of Rs 17,625.

He said the debt continued to grow over the next two years and eventually crossed Rs 15 lakh, with the man spending 57% of his take-home salary, around Rs 51,000, on debt repayments. He added that every new loan was used to pay off old ones.

Vivek explained that this is how a debt spiral works, where one loan adds an EMI, which reduces cash flow and forces the next loan.

He warned that if monthly EMIs are already above 40% of take-home salary, it should be treated as a warning sign.

He further advised that in such situations, the first step should be to stop taking new loans, then list all outstanding balances and interest rates, and begin clearing the highest-interest debt first.