In this fast changing world the notes are being replaced by plastic money (cards). but this plastic money sometime takes the customer in a debt trap if not used wisely. Now we generally see young professionals using credit cards, which often exceeds their payout limits and then starts a cycle of Debt trap.
Here now we will tell you about debt trap and its impact on the CIBIL credit report. Many are stuck in debt trap and looking for a way-out.
What is 'Debt trap’?
To understand the word 'Debt Trap', let’s take the example of Mr X; a bachelor who lived life king-size. He recently got married and continued his lavish lifestyle. Had honeymoon in Europe and thereafter a couple of weekend trips within India. His entire expenses were paid via a personal loan and credit cards. Within four months of his marriage, his entire salary was going toward repaying living expenses and EMIs leaving him no savings at the end of the month.
He now fears any default in repayment would put him in trouble and ruin his Credit Information Report (CIR) managed by CIBIL.
What should one do to avoid a similar situation?
Read more to know options to get rid of bad debt
Regards
Team
TheEquityMarkets
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