In the name of life style people are getting into the debt trap. People spend a huge portion of their monthly income in EMIs and Loan repayment. Taking a loan is not wrong but taking a loan for buying luxurious and unwanted stuff is CRIME. People blame their low paying jobs for the financial screw up rather than their bizzare spending habits. Rather than allocating their income properly people tend to postpone the Investment portion of their income and all the money goes to the WANTS part i.e luxuries,vacation,car etc.
If you are already in this trap how will you get out this? Is there still a way out?
Yes, following a simple method with a great discipline and consistency you can get out of this trap. Firstly, you need to write down all the details of loans you already have, i.e Type of loan,EMI amount, rate of interest, outstanding amount, tenure. For example an individual has 4 loans namely 1. Home loan, 2. Car loan, 3. Personal loan and 4. Credit card loan. Then he should write down all the above details regarding the details on a sheet in preferably coloum format. After writing this you know the total outstanding amount of loans to be paid, the interest you are paying and the tenure for which you have to keep paying to get DEBT FREE. Now the next step is find out the loan with least outstanding amount, it can be a loan with any interest rate and tenure. After identifying the loan you shall start making repayments in excess of the EMI as much as possible. By doing this the loan will be repaid in lesser time depending upon the excess payment made, the more you pay the lesser time it takes to eliminate the loan. Once a loan is repaid identify the next least outstanding loan amount, now you have an extra amount to pay i.e the EMI of the already repaid loan as well as the extra amount that you can spare apart from other expenses. Following this will help you to eliminate all the outstanding loans in substantially lesser time and you will save a huge amount as interests.
Once all the loans are repaid you can invest the same in different avenues and create a good corpus for your financial goals. In conclusion, actions are more important than a plan. You should work on these lines in a disciplined and consistent manner till the time you achieve your goal of being DEBT FREE.
Any questions/queries:
Email id – mr.investsmart01@gmail.com
Whatsapp – 9920978346
Instagram – mrinvestsmart
Facebook – mrinvestsmart
mr.investsmart 