WHAT REASONS COULD LEAD YOU IN DEBT TRAP?

Most of the borrowers don’t realize that they are getting into the snare with a serious issue of debt trap. However, one ought to know about the signs which show that they are getting into a debt trap to be financially fit. One should avoid doing debt consolidation mistakes also. It is evident that debt burden can be terrible if it goes unnoticed. Mostly, people "Apply For Loan" to repay the previous debt. Hence, we are here to help you guide through some reasons that can lead you to debt trap.

• Unaware of the root cause of debt trap: However, debt consolidation can be a simplest ways to get out of a debt burden but if you are unaware of the root cause, you may not succeed in ending the financial crunch. Therefore, to get rid of it, one must rectify the reasons for getting into it.  To rectify, one must evaluate his/her monthly expenses, credit card bills etc. moreover, plan a monthly budget and follow it strictly to save some bucks to repay the previous debt.

• Keep an eye on credit card use: It is one of the major key factors that easily get you into a debt trap as they come with huge offers and lure the customers easily. However, the important thing to remember here is that the interest rate charged on credit card use id very high. So, it is necessary to keep a check on use of your credit card. Always pay your credit bills on time within the interest free period because delayed payments accumulate heavy penalties.

• Make a repayment plan before you borrow: Although loans and credit cards look tempting but it’s important to have repayment plan before the access. Hence, when you "Apply For Loan Online" or offline, use EMI calculator as this estimation will help you to plan repayment strategy. Well, borrowing can be easy these days but if you don’t plan well, it become tough to repay it. Always borrow according to your repayment capacity as well as have a strategy before a worst hit you hard.

• Lack of knowledge: In an emergency situation, people borrow loan in hurry which could be a huge mistake and lead you in a debt trap. Therefore, if you are in need of borrowing, your first step should be having a proper knowledge about the loan terms and conditions. It is always good to analyze your requirement, research for the lender that offers best deal with lowest possible interest rate.

• Never default on your payments: If you default on your EMIs, it will not only charge you a late fine but it also has an adverse effect on your credit score. If you keep defaulting on your repayments regularly, it reflects weak financial management skills which can lead to debt trap. So borrow as per your repayment capability and be timely with your EMI payments. at the last but not least, avoid securing a new loan to pay the previous one as it will cause a serious damage to your financial health.