A debt problem doesn’t happen overnight – there’s always a build-up to it. Unless you nip it in the bud, you’re in for a rude awakening. Having said that, there are some tell-tale signs you can watch out for that may indicate that you need assistance with your debts. Here are 7 signs to keep a lookout for:
- Not paying credit cards in full each month
While you might think you’re doing alright by simply making the minimum payments required of you every month – this couldn't be further away from the truth. By only meeting the minimum obligations owing to the high-interest rates applicable on credit cards, you’re causing your debt to snowball quickly. This could leave you with more debt than you can handle.
- The constant need for new loans/cards
One of the worst mistakes you could possibly make is getting another card or availing a loan to fund your debt problem. It’s understandable that having no credit to speak of may leave you feeling helpless about your condition, but by taking on a new card or loan, you might get yourself stuck in an endless debt payment cycle. Here’s some food for thought – under no circumstances should you take up another loan or a personal loan for example, to pay off your existing debt. This is because you will only end up servicing an additional liability – something which should be avoided in the first place.
- Hiding spends or debts from a partner
Constantly trying to stash away credit card bills, lying or hiding your debt situations from your partner are classic signs of mounting debt. If your financial issues are driving a wedge between you and your close ones, it's time to seek help before it becomes even harder to dig your way out.
- No budget or spending plan in place
When you don’t have a budget, getting into debt is inevitable. People often tend to spend freely and willingly without having a proper plan. This kind of frivolous spending invariably leads people straight into debt. Without a budget, you will have no idea how much you owe which only goes to show that you've really little control over your finances.
- Missing on payment of EMI
One clear-cut indicator that you’re neck deep in debt is when you start receiving unscheduled calls from debt agencies regarding missed EMI payments. Taking necessary, preventive steps by preparing your finances in advance could help you save a lot of time and inconvenience.
- Impulsive spending due to financial worries
If you find yourself in a lot of debt, the stress associated with it is a trigger for anxiety which might lead you to spend impulsively or indulge in comfort spending. Financial stress can get the better of you and make you more vulnerable to money trouble.
- Refusal by financial institutions to consolidate debts
Financial institutions usually rely on credit scores issued by agencies that give them an idea about the level of risk while lending to you. If you have large amounts of debt or have been constantly missing your EMI payments, your credit score will suffer. This hurts your chances of getting approval for debt consolidation loans. If you have been rejected rather than taking on new liabilities, you should look at reducing the number of debts by formulating a robust, repayment plan.
Asking for help when you’re embroiled in debt could be one of the hardest things you might ever do, but living with debt is even harder. You don’t need to feel helpless and alone during such times. At 5nance, our expert advisors are waiting to provide transparent financial advice and point you in the right direction. We provide financial guidance, & assistance that will help you improve your Credit Score. You might get back on the right track within no time. Ask for support from 5nance today.