Remember the fable of a frog that boiled itself to death after falling into a pot of water? The water was pleasantly warm when the frog fell in, but the amphibian simply adjusted its body temperature to stay inside. When the water reached its boiling point, the frog could neither manage its body temperature nor jump out successfully. Same is the case with a large section of people who fall into a debt trap without realising it. Like slow poison, it erodes their quality of living and peace of mind.
Typically, a debt trap is the result of mindless borrowing without checking if one has the ways and means to repay it. Loans are the easiest tools at common man’s disposal to fulfil his dream of buying a house or car, or to meet medical expenses. As such, debt is unavoidable for most people. But debt trap is something that everyone should be wary of. Let us look at some warning signs that indicate a person is falling into a debt trap.
While lifestyle changes and finding new ways of income can save you from the debt trap, the most important step is to take a debt consolidation loan. For that, all outstanding loans and their interest rates should be calculated, and a lower-cost personal loan that can clear all of them should be taken. A debt consolidation loan allows you to focus on paying only one pending loan. A debt consolidation loan also reduces your chances of missing a payment or making a late payment and may improve your credit rating. Professional loans are the best way to make a new start for working professionals who have fallen into the debt trap. Professional loans offer competitive interest rates and are priced better than personal loans. What matters most is making the right choices to live a debt-free life.