3 Early Signs That You Are Nearing A Debt Trap
3 Early Signs That You Are Nearing A Debt Trap
Using credit cards and availing loans is a part of life and nobody really treats
it as something that may land us in trouble. However, excess use of anything
may make you pay through the nose. Here are some symptoms that indicate
that you are in a debt trap.
1. Too Much Borrowing May Lead You To A Debt Trap:
You should ideally be using not more than 30% of your monthly income to
service your debts. In case of good loans such as education loans and home
loans, this may further be relaxed to 40%.
If most of your financial gain goes to service debt, then you have got to borrow
more money to pay for your consumption. This can worsen the situation,
ultimately pushing you into the debt entice.
2 You Are Unable To Pay Credit Card Dues:
Credit card dues are the costliest loan in most cases. If you can’t repay the bill
in full, then you are nearing the debt trap. But if you are finding it troublesome
to pay off credit card dues for many months, it's time to take a hard look at your
finances.
3 No Bank Is Offering You A Loan:
This is the ultimate sign that you are in a debt trap. Banks do check your credit
report before lending you cash. If they verify that you just have borrowed to the
hilt, the bank won’t extend you additional credit.
That makes you scout for unorganized ways for more credit, which comes at
much higher rates compared to that offered by banks.
Image Courtesy
Financialexpress.com
M.economictimes.com
Fundstiger.com
outlookindia.com
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