Sometime we get catch in such financial crisis due to situation or other any reason , after that it becomes difficult to pay monthly instalment of credit card bill, car , home loan, at such a time you have a way to come out with a new loan . it would have happened because your civil report would have got spoiled till then.
Here are some points that will help you that How to clear loans faster and debt trap
1. Pay off High Interest Loans First
Make the strategy of paying your loans and bills carefully, decide which one you want to eliminate the debt first, Distribute all the loans on the same priority bases, your strategy should be that the most expensive debt should be paid first
2. Extend The Term of The Loan
After discussing the bank, tell them about your current financial situation and ask for more time time to repay the loan, In this way you will be able to reduce the pressure of EMI, By getting time , you will be able to search for earning option.
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3. Get Help With Savings And Property
Property always helps in dealing with financial crisis, you can use your saving to pays of debt, While mortgaging or Selling Property, you have to pay off the big loan.
4. Take Loan Against Gold
You can use this option in case you fall into the debt trap, you can take loan against gold , ornaments or coins, this is the best and fastest option to use your property.
5. Consider debt consolidation
Debt consolidation allows you to take a single loan to pay off your different loans. Once you consolidate your debt, you just have to worry about repaying one loan instead of servicing different loans with varying rates of interest on different dates.
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6. Build an emergency fund
It’s must to have a separate fund only to deal with financial emergencies. Ideally, an emergency fund has to be of at least 3 to 6 months of living expenses. This fund helps you to navigate through tough times without having to rely on a loan.
You can invest this money in various investment tools that assure high liquidity. Although a bank saving account is a good option to keep your emergency funds but it doesn’t give you the good returns on your investment. You can invest them in debt fund, mutual fund and also you can consider parking your emergency fund in a chit fund that ensures quick liquidity and better returns. How to clear loans faster
7. Leverage your investments to repay debt
If you’ve invested in high return schemes such as stock market, mutual funds, real state, bank deposits, chit funds, you could use them to reduce your debt obligations. Once you’ve settled a considerable amount of debt, you can focus on rebuilding your wealth again.
8. Stop taking on more debt
How to get out of your debt trap How to clear loans faster increases your financial obligations and adds financial and mental stress as well. So it is better to avoid them altogether.
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