Last, we spoke of debt traps and how easy it is to fall into one – easy EMI options flashing across e-commerce platforms, personal loans available and of course the credit card and its unpaid bills. Today, let’s talk about how to get out of and more importantly stay out of debt traps.

If dealt with systematically, you’ll be able to get out of a debt trap sooner than you think! You don’t have to be the one to live paycheck to paycheck with unpaid loans, EMIs and bills hanging like a nook from your neck.

Here are some easy to follow suggestions that can prove handy when you feel trapped under debts:


First thing first, list down all the debts so that you clearly understand the trouble and the depth of it. The details should include the kind of loan – EMI on car loan, home loan, personal loan or credit card bills along with principal amount borrowed, rate of interest, installment amount and number of years left. This will help you prioritize which one to focus on, which is also our next step.


Once the above list is ready, identify the most expensive debts – a large principal amount and higher interest rate. For example, a credit card bill is expected to have a very high interest rate compared to personal loan, car loan or education loan. You need to clear the biggest rock first. Even if it means refinancing, i.e., taking another loan with a lower interest rate.


As a next step, you need a plan. A plan that can help you pay off the loan. You could either try consolidating all the loans and have one singular loan instead. You may check with your bank for this, as some banks provide such an option to let you have a single EMI instead of several. Or you can look into your existing investments that are yielding really low returns and are not ear-marked for any financial goals. Use those idle investments to pay off your loan.

You can also figure out an extra means of income (even if temporary) just to pay off the loans. As the years go by, there will be increase in income, some bonuses, investment income or even a matured FD. Use these to pre-pay your loan and get off the debt earlier.

PS. – If you have too many loans looming over your head then commit all your surplus income towards paying off these loans instead of investing the money. Take this decision only when you have consulted a certified financial advisor.


The moment you decide to use the credit card, it is an indication that you’re going beyond your pocket. Unless unavoidable, refrain from using credit cards. They have the maximum interest, options like paying minimum amount due seem lucrative at first but come back with interest rates as high as 40% when free credit period is over. Not only the purchases but such high rate is applied on outstanding amount too. Making you fall into a trap difficult to get out of.


Ideally, all loan amount combined shouldn’t be more than 40% of your total income. However, if you feel you’re in a debt trap, then most likely you’ve crossed the 40% limit that are straining your finances anyway. With uncertain times ahead, it is pertinent to not take any additional amounts and instead put all efforts towards easing off the existing ones.

It might seem extremely difficult to get out of a debt situation but all you need to do is believe there’s a way out, figure the way out and then stick to your debt pay off plan till you get out of it. If it’s too overwhelming for you to sit down and do this analysis on your own, drop us your details here and we’ll help you chalk out a plan for FREE.


SLA Financial Solutions is a Leading Advisory firm based out of Jaipur. We are amongst the top 5 Financial Advisory firm with a team of 20 + people. We have been awarded twice by CNBC as best Financial Advisor across North India.

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