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How to Avoid Debt Traps in India

Apart from availing short term personal loans, when you fall into a debt trap there are some important and easy tips which you can take care of to avoid falling into a situation of financial crunch.<br><br>Visit Site- https://www.moneyinminutes.in/

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How to Avoid Debt Traps in India

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  1. How to Avoid Debt Traps in India

  2. Salaried individuals in India are more prone to fall into debt traps as they are forced to borrow money to overcome the financial crunch, whether it is due to some kind of medical emergency, family responsibilities or personal ambitions. • One irresponsible money-borrowing decision lands them into a heap of financial burdens.

  3. There are several indicators that help us avert debt traps only if they are identified early on. Some important tips on how to avoid debt traps in India are:

  4. 1. Don’t let the EMIs exceed fixed expenses- • Make sure there’s enough liquid money to manage daily or monthly household expenses like utility bills, rent, school fees & tuitions, etc. • If EMIs take up nearly or more than half of the income, there is hardly any money left for spending on fixed obligations.

  5. 2. Avoid long-term loans- • Over long-term loans, Instant short term loans have an advantage – the EMI dues are limited to a short period of time. • The financial burden of such loans ends sooner, whereas long-term loans seem to not end at all.

  6. 3. Prevent cash withdrawal from credit cards- • The interest rates on credit cards are exorbitantly high, where the annual interest can size up to 40% or more. • Un-cleared credit card dues is a big red flag for seeking loans and credit cards in the future.

  7. 4. Do not take advantage of credit scores- • It is wise to borrow money that is the bare minimum and manages to meet the financial needs precisely. • Everyone starts with a good credit score, but one unpaid debt can downgrade the credit score immensely.

  8. 5. Consider the current repayment capacity only- • Avoid falling into debt traps by taking huge loans, anticipating a bonus or increment in salary. • Falling through these anticipations you’re left with an unbearable debt to repay.

  9. 6. Missing payments is not okay- • Missing payments leads to further complications in repaying existing loans. • Even with ample money to end the debt, money lending organizations trouble the defaulters with huge foreclosure costs.

  10. 7. Don’t fall for “easy EMIs”- • Choosing the “easy EMI” option is the quickest way to fall into debt traps. • Sooner or later, people get addicted to buying everything on such EMIs.

  11. So, keep these are the tips in mind and stabilize your financial condition, instead of making it even worse by falling into debt traps.

  12. Let’s not fall into the vicious circle of damage. For more details, visit-https://www.moneyinminutes.in/

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