Not so long ago in the Bollywood movies of the 60’s and the 70’s, debt ridden farmers were a common feature. However what the society does not realise is that the debt trap has become a situation which is no longer limited to the poorer sections only, the urban middle class has also become a victim of this situation. The medium and reason for the debt trap may be different but the fallout is the same.
Here are some tips that could come in handy if you own a credit card or have an outstanding debt of any kind:-
·A credit card should be used keeping in mind the monthly revenue that one is earning, the unavoidable expenses and basis the gap how much exposure one can incur
·Post every transaction, check your credit card outstanding. It can easily be done online. This habit can actually save a lot of pain!
·Be aware of your EMI dates. Forgetting an Emi date is not an option
·Don’t get into the trap of Minimum Amount Dues of a Credit card. Even if you do, try to keep the span of that activity short
·Create a savings account other than your other regular savings instruments. Put money that is left into this savings account at the end of the month. A corpus grows up which can help you in tight corners. Don’t touch this account unless needed
·For Car Loans or Personal Loans, the ideal tenor is 3 years and not 5 years. If possible foreclose the loan. In this case it would be good if one can get Personal loans from financiers which offer partial prepayment options. It helps in clearing off the loan early with an increase in your salary
·Don’t swipe credit cards for partying as a principle, the bills go above one’s head!
However it is to be remembered that in spite of all precautions, Debt can mount without warning, so one has to keep in mind the alternate options.
It is advisable to take a instant personal loan to clear all your credit card dues and consolidate the debt at one point. It simply means lesser monthly obligation in the form of EMIs and also more savings. These loans can be obtained from Banks, NBFC’s and also through the new kid on block, Peer-To-Peer platforms.
Peer to Peer lending platforms are a relatively new medium for obtaining short term loans online. These are generally hassle free processing points and it is not necessary that personal loans will be given only to the best of the customers, subprime customers are also given loans. However, the obvious clause which gets attached is higher rate of interest and more verifications. Leading Peer-To-Peer lending platforms in India like LenDenClub provide quick and hassle-free personal loans which are approved on the same day and disbursed within 3 days.
There are other drastic options like loan settlement options but it is again an unwanted solution as it is directly affecting your Credit/CIBIL score which means problems in obtaining finance later, employment check becomes negative and also in future, the availability of essential services will be difficult with a derogatory bureau check.
To wrap things up, it is not wise to incur unnecessary debts, but if incurred, handle the situation prudently with caution as repayment options are easier than they were before. Peer to Peer platforms act as saviours in such situations for they are much more flexible and less conservative in giving out loans.