Too Many Loans? Here's How To Ensure You Don't Fall Into Debt Trap

Credit cards and loans are a double-edged sword when it comes to fulfilling your financial needs. They can allow you to get things which may not be in your budget at that point in time without breaking your bank account. However, they can also increase your financial burdens and result in substantial equated-monthly-instalment payments every month.

Having too many loans or credit card bills can adversely affect your credit score and lead to debt trap. You may have a financial crisis at the end of the month if you do not plan out how you can pay your dues. If you need to avoid a budget crisis at the end of the month, you need to manage your debt repayments effectively.



Here are some tips to help with that.Tips To Manage Loan RepaymentsUnderstand your debts and create a repayment strategy: Ensure that repaying your loans is the main expense. Budget everything carefully and create a plan to repay your debts on time.

This includes prioritising the expensive loans first and reducing unnecessary expenses.Debt consolidation: Check if you can take a larger personal loan with a lower rate of interest to pay back your dues. Debt consolidation can combine several pending dues into a single loan, allowing you access to lower EMIs and more favourable rates of interest.

You should maintain a strict budget for repayments and ensure you don't take on any more expensive debt after consolidating your dues.Credit card balance transfer: You can transfer your balance to a new credit card with a lower rate of interest, which is often promotional. Opt for this only if there is a big difference in the interest rate and you can pay off the dues before the promotional period expires.

Pay off outstanding credit card dues: If you have a lot of credit card payments left, try repaying those first. These dues often have steep penalties and one missed payment can set back your financial goals by a significant margin. Missing credit card payments can lower your credit score as well.

Negotiate with lenders: Making a budget and sticking to it might not be enough. You might need to discuss your repayment terms with a lender to see if you can change some of the terms. Banks might offer you respite or consolidate your debt in some cases.

Negotiating with lenders can work out in favour of the borrower. Alternatively, they can seek professional advice from consultants on how to repay their debts in a manner that leaves them with enough for basic expenses.Home Loan Interest Rates In April 2025: SBI, HDFC Bank, PNB, ICICI Bank And Others; Check Latest Rates.

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