Have home loan, unpaid credit card bills, or owe money to people? Relief here! Do this to get out of a terrible situation
If you are an individual finding problems paying back your debt than you must read this. A debt trap can lead to tragic consequences including closing down of business, job loss, financial losses etc.
If you are an individual finding problems paying back your debt than you must read this. A debt trap can lead to tragic consequences including closing down of business, job loss, financial losses etc. Therefore, think ahead to save yourself from such a terrible fate. So, there can be several factors that may lead to debt trap. Some of the top reasons could be inability to save money, not investing right, unnecessary expenses etc. Radhika Binani, Chief Product Officer of PaisaBazaar.com has shared a few important lessons which can help you to stay out of this debt trap.
What is debt trap?
- When you lose control over your financial situation
- EMI, credit card bills are not being paid on time
- Debt is increasing day by day rather than decreasing
- Loans are hovering and EMIs not being paid
- It is difficult to repay the loan from present earnings
How to avoid debt trap?
- Always pay your credit card bills on time
- Don't spend through credit cards carelessly
- Keep utilization of credit cards up to 30%
- Plan before taking a loan
- Never delay an EMI repayment
- Do shopping wisely
- Avoid unwanted items
What is a credit score?
- Credit Score tells you about your credit history
- Credit score is a number with three digits
- Financial transactions determine credit scores
- Transactions with banks and financial institutions are recorded
- CIBIL is the country's largest credit bureau company
- CIBIL score is considered as your credit score
How to improve your credit score?
- Your financial transactions determine the credit score
- Credit scores affect many things
- History of payments plays an important role
- Non-timely billing, EMI late filling makes it bad
- Keeping excessive credit cards is a bad habit
- Avoid excessive use of credit cards
- Pay your bills, EMIs on time
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Side-effects of low CIBIL score
- If CIBIL score is low, there will be difficulty in getting loans
- Banks will find it difficult to approve a loan
- Loan Sanction/Loan Clearance Disapproval depends on credit scores
- Low scores are more likely to reject loans
- Low score impact on loan amounts too
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