Pulling Out of the Debt Trap ; the Financial Slowdown has Set Back Many Households On Their Debt Repayments. Bt Examines Some of the Options and How You Can Bridge the Gap.

Summary

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Delhi-based Anuradha Saikia (Name changed) was working as Assistant Manager (marketing) in a big export house with an annual income of Rs 7 lakh. Two years ago, Saikia, 32, took a car loan of Rs 5 lakh and used multiple credit cards to buy consumer goods to live a lavish life and accumulated a debt of Rs 7 lakh. Till the time she lost her job in January this year, she was completely unaware of the fact that her monthly income was not sufficient to match her lifestyle expenses. Today, with savings of Rs 2 lakh in her bank account, she is unable to pay off her debt. I still have money to pay off my debt over the next 3-4 months. After that, I will have no option but to default on EMIs unless I get some job, she says.

Debt, be not proud

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Extract

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Pulling Out of the Debt Trap ; the Financial Slowdown has Set Back Many Households On Their Debt Repayments. Bt Examines Some of the Options and How You Can Bridge the Gap.

Has debt repayment become a burden? Here's the way out.

Call the creditors

Tell them about your inability to repay and work out an alternative schedule

Prepay debt

Can take cheaper loan on NSC/FD/insurance to retire high-cost loan

Take credit-counselling

Seek help from counsellors if you are unable to deal with the creditors

Review expenses

Create a spending plan; monitor it regularly

Defaults on housing, auto and personal loans are on the rise, with many individuals fac...

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