Having loans and credit cards can add a severe financial obligation on an individual. In case of unforeseen circumstances such as job loss, you have to make sure that you have an alternate source of income or have made enough savings to keep paying your loans or credit card bills on time. Once you default on a loan payment, the debt cycle starts and you will slowly start moving into a trap.
Dhiraj Bhatia, CEO of Express Debt Management Consultancy advised that the sooner you understand your financial instability the faster you can get out of debts. There are more than a few options available for borrowers to get out of debts and live a debt free life, he said.
“Most people do not take any action until it’s too late. As soon as you feel something is not right, stop making individual efforts and seek an expert advice. A strategy has to be developed which leads them toward a debt-free life. It does not happen overnight but the sooner you start the faster you see results,” said Dhiraj.
Here are his other expert advices to avoid indebtedness:
- Before obtaining any loans, one must understand their total liabilities and how much they have to pay on monthly basis. Before borrowing from a bank/financial institution, the pros and cons must be strictly evaluated.
- Make sure your total monthly loan and or credit card payments should not exceed more than 50 percent of your net salary per month.
- A good practice would be to stay away from credit cards as their charges are way higher than other personal loans.
- Pay on time in order to avoid any late fees and extra charges to the account.
- Always pay off the existing debts first before borrowing again.
- If you have 2 or more unpaid credit cards and loans seek professional help and avail of debt consolidation program and or debt restructure program. Under Debt Consolidation program, all the existing liabilities are eliminated and converted into one single payment. Debt Restructure program is where the existing liabilities are restructured by a financial expert who would also negotiate with the creditors on behalf of the debtor.
For more information on debt consolidation program and debt restructure program, visit www.expressdebtmanagement.ae.
