Everyone wants financial stability in life. But, at times, to manage inevitable expenses and maintain a normal lifestyle, people opt for unsecured, high interest paying loans, like credit cards, or from the market. Over time, the debt amount exceeds the income, and it seems impossible to repay them. This situation is termed a debt trap.
The two most prominent parameters of a debt trap are:
EMI-Salary ratio- Experts say that the amount of EMI payable every month in comparison to your salary amount should be below 0.3. This means if your salary is INR 10,000, your monthly EMI payable, on account of your loan, should not exceed INR 3,000.
Loan-Asset ratio- If you have a loan amount of INR 20,00,000 and a total asset value of INR 5,00,000, your loan-asset ratio would be 2.5, which should be below 0.5.
Under such situations, you need to do the following:
- try increasing your income
- work towards reducing your loan amount
- grow your assets.
If the above is not handled on time, you will soon be in a debt trap.
How to get out of a debt trap by taking an instant loan online:
Insta loan apps are among the most modern and easiest systems for getting immediate cash loans in an emergency. What makes it so popular is that:
- You can simply download an online loan app like Avail Finance and apply for the loan using your smartphone/laptop, right from the comforts of your house
- These are unsecured loans and do not require any security or collateral
- It requires minimal documentation for the loan approval
- The loan amount gets credited to your online bank account once it gets approved.
- These loans give the borrower the leverage to choose their repayment tenure as per their convenience. They can either pay monthly, quarterly, or even half-yearly, as per their convenience. Generally, the tenure ranges between 1-3 years.
Insta online loans can help you get out of your debt trap in more ways than one.
- You can consolidate all your loans into one instant personal loan instead of paying several high interest loans every month. This way, you would be paying only one lender every month, that too at a lower interest rate.
- An instant personal loan allows you to automate your payments to the lender. This means you would not defer from making payments every month, and this ultimately would keep reducing your loan burden, slowly yet gradually.
- You can choose to pay off your most expensive debt by taking an instant personal loan through an insta loan app. This way, instead of consolidating all your debts into one, you would be able to get your hands off the most steeply payable interest for your loan amount.
- Having too many loans and defaulting on their payments would drastically bring down your credit score. An instant single consolidated loan would help you pay on time and thus increase your credit score, too, along with getting rid of your debt trap slowly and steadily.
A debt trap may seem like a whirlpool that is almost impossible to escape. But acknowledging your problem, identifying the area’s leading you into a debt trap, creating a plan to work upon it properly, and making a budget and prioritizing your needs would soon bring you out of it with flying colors.
An instant personal loan from a reliable online loan app can contribute majorly to your endeavor to come out of a debt-laden situation. Insta loan apps like Avail Finance even provide professional help to assist you with your planning strategies for consolidating your previous loans and working towards discarding them completely. So, think well, choose wisely, and act sensibly, for even the most difficult hurdles can be crossed with a calm mind and sensible reasoning.