Q I have recently cleared overdues on my two credit cards. The total outstanding is Rs 50,000. Since my income doesn’t permit me to pay off the entire outstanding, I have been paying the minimum balance. One of the credit cards charges high rate of interest. Please suggest ways to get out of this debt trap.
The best option for you is to take a friendly-loan from family and friends. If it is not possible, you could sell gold jewellery or try to take a loan on investments. If you don't have such assets, but you have good repayment track, you could take a personal loan. Another option is to use the 'balance transfer option' on to a new credit card, where you can transfer the balance from your existing credit cards at low rates of interest for a short period of 3-6 months. If you have defaulted on the outstanding in the past you can take the help of organisations such as DISHA (http:// dishafc.org/) for free guidance.

** I am working on a contract basis with a monthly income of Rs 16,000. I want to take a personal loan of Rs 2 lakh. Am I eligible?
For availing any credit facility, you will have to prove the consistency of your income. Either you are working as a contractor or you are employed by the company on a contract basis. If you are working as a contractor the amount payable to you is liable for deduction of tax at source if it is more than Rs 50,000 per annum. If you have any proof of such tax deduction regularly for the past couple of years, it should be enough.

If you are a regular employee under contract of the company, they will any way be paying you a regular salary with the standard deductions. If so, the proof of the relevant deductions if they have been made constantly for at least a couple of years, should be enough for you to qualify for a loan. If the salary has been directly credited into a bank account regularly, then the proof of salary statement for the last three years is sufficient for establishing your regular source of income.

It will be difficult to get the loan if the amount is being paid in cash and you have no documents to prove payment of such income. In case you have any security to pledge for your loans, you may get better terms from the bank and the rate of interest will be lower than the personal loan.

** My mother is 59-years-old and I want to take a medical insurance for her. She is suffering from hypertension and diabetes. Please tell me what is the maximum amount for which I can get a cover from PSU insurer. Does it cover her pre-existing diseases and cover critical illness if any in the future?

As your mother is 59 and she is also suffering from hypertension and diabetes, it will be very difficult for you to get a medical policy for her. Still you can try New India Assurance, Max Bupa and Apollo Munich for getting a medical policy. Public sector company like New India Assurance have a clause that restricts room rents to 1 per cent of the sum insured or Rs 5,000, whichever is lower. This means in case you stay in a room costing higher than this limit all other expenses will also be reduced on the basis of what you would have incurred had you stayed in a room that cost below your limit. For full understanding for impact of sub limit in room rent please read: http://india.apnapaisa.com/blog/health-insurance/watch-out-room-rent-sub...

** I am a 40-year-old man staying with my wife and two children. I have a mediclaim of Rs 75,000 and Rs 25,000 each for my family members, all from Oriental Assuran-ce co. I have been diagnosed as having cancer recently. Is there any policy that covers the existing critical illness?

Unfortunately, there is no policy, which will cover you for your pre-existing disease. You may certainly choose to increase the sum assured of your family members to protect them from any kind of disease in future since they are under insured.

Harsh Roongta is the CEO of Apnapaisa.com. You can send in your queries to movingmoney@deccanmail.com