There is an old saying in Hindi ‘agar zindagi ko khushi ke sath bitana chahte ho to Karz, Farz aur Marz in teeno se dur raho’ (If you would like to live a stress free and happy life keep away yourself from Loan, Responsibility and disease). But in the modern age of materialism every person specially middle class wants to improve their lifestyle to buy a car, own a house, want to send their children to convent schools. They even d’ont hesitate to take a loan and credit card to meet their needs. Banks and other lenders are also offering Consumer loan and credit card on easy documentation. Due to unproductive uses and high rate of interest, there is a huge possibility to get in debt trap. Nowadays debt trap is very common in salaries class in cities and metros. Here are the ways to get out from debt trap.
- Set your payment priorities : The first thing what we have to do to get out from debt trap is to set payment priorities. Generally credit card carry high rate of interest and several charges as compared to other loans . Most of the banks in India are charging interest on credit card dues @ 40% to 50% per annum plus GST. Apart from interest there are so many charges and penalties charged by banks in case of late payment and overuse. So it is always advisable to clear credit card due as soon as possible then only go for personal loan and other loans. If there is ECS for your EMI then make it your first priority even before credit card. If EMI is bounced both lender and bank charged for that and also may results in permanent closure of your account.
- Try to pay minimum due: If you are not in a position to pay credit card bills .Then try to pay at least minimum amount due on time to avoid late payment charges and penalties by bank. Minimum amount due is decided by bank and may vary from one bank to another . One point you should keep in mind that interest is still charged even in case minimum amount due is paid.
- Covert your Credit Card bill in EMI : If you are not be able to pay your credit card bills on time. You can request to your banker to convert it in EMI as per your convenience. Generally interest on EMI is almost 1/3rd of the normal interest charged on credit card dues.
- Control over unnecessary expenses: It is very important to control over the unnecessary expenses till the full and final payment of loans and credit cards.
- D’ont ever think for new loan: D’ont ever think for new loan under any circumstances until the full and final payment is made. It is always good to go for new loan only when you are out of debt trap.