Tips to get out from Debt Trap

1. Tips to get out from Debt Trap It often happens that a borrower gets caught into debt trap when they fail to repay the loan or credit cards bills on time. Spending money beyond your capacity is not impossible but it may get you caught in a debt trap. Now a day, having a credit card is a trend. You can see credit card if you open any normal middle-class person’s wallet. Upper middle and higher class people have at least two or more credit cards. It’s good to have credit cards but it’s also bad to owe their outstanding. Spending beyond the given limits is easy with a credit card or loan amount but the failure of bill payments can be a reason of debt trap. Apply for a loan or a credit card is so easy but repayment with high-interest rate becomes quite costly for a person. Credit cards come with hefty interest rates so it’s very hard to pay their interest rates regularly. Missing of any EMI or failure of repayment within the tenure may get you caught in a debt trap. www.banknomics.com

2. The debt trap is a common problem in the financial world and people from many countries are suffering from it. There are no certain and quick guidelines to get out from the debt trap but we can follow few tips to get rid of it. Follow these tips to get out from the debt trap: Understand your current running debts Find other alternatives of funding Pay off your Most expensive debt first Go for Debt Consolidation and other resources Stop the use of credit card and go cash friendly Understand your current running debts This is the fist and most important way to get out from the debt trap. Make a list of your all running debts and find out most costly debt from them. You can talk to your Bank or service provider to know all your current loan payments, credit card bills and other details of financial products you own. Also check your cibil report as it contains the issues that causes you in heavy debt. After this list finds out the interest rates on your debts. This will help you to understand about your most costly debt and also gives you an idea that which debt is necessary to pay off faster. It’s also important to keep maintain your CIBIL track and getting it in the range of 700-800. Find other alternatives of funding After the proper understanding of your all debts, it’s time to arrange money to pay off them. Now list out all your assets and investments like fixed deposits, life insurance policies, Home, and other assets. Remember, small funding can give you a big relief. Pay off your Most expensive debt first Now it’s sure time, meet your minimum requirements to pay off your debts. Financial consultants like Banknomics suggest to pay off the most expensive debts first. Here are the most expensive debts means the debt with high interest rates. www.banknomics.com

3. Go for Debt Consolidation and other resources Debt consolidation is the good way to get rid of the debt trap. In most of the cases bank converts the credit card bills into the Personal loan EMIs. With Debt consolidation, a borrower can pay all their different debts from a single loan amount and pay for the only single debt. Stop the use of credit card and go cash friendly Only cash transactions can be a great way to get rid of the debt trap. Banknomics India suggests stopping the uses of credit card until the finishing your debt payment. Go cash friendly and pay all your expenses by cash. Also control your spending habits. Understand the Debt Trap Recovery Guidelines with Banknomics and get out from the debt trap easily. A credit card is the best thing for instant funding arrangement but miss use of these financial products may get you caught you in debt trap, so be careful while using a credit card. www.banknomics.com