A Guide to a Debt Free Life
August 15th is around the corner and India is gearing up to celebrate Independence Day. Freedom. But what does freedom mean? Among other things, it is the ability to live a life that’s financially secure and not weighed down by debt.
Personal loans in India have boomed by 89% between 2014 and 2018, as per statistics recorded by the RBI. In comparison, household savings have gone up by a mere 18%. These stark numbers are a testimony to India’s constant struggle with debt. Medical emergencies, delayed salaries, or the loss of a job are all impromptu factors that contribute to creating a cycle of debt. Crises like these cannot be avoided, but you can be better prepared to face them so that you alleviate debt from your life as much as possible.
We give you a few pointers on how to go about it.
Know how much you owe
Take a good look at exactly where your money is going and then come up with a plan to restructure your finances. Is there a loan that you can pay off at once? Is there an EMI you can reduce? These are small measures but will have a significant psychological impact and will help make you feel better.
Set a saving benchmark
As the numbers have proven, we are simply not saving enough. Now, everyone’s financial journey is different, and so is each person’s capacity to save. After paying for basic necessities, EMIs and investments, how much do you have? Yes, perhaps hardly anything but setting a minimum benchmark that you know you can meet helps in putting aside that much money. Maybe there are months in which you might end up saving way more than your minimum. Remember that every rupee not spent is a rupee saved.
A loan to repay a loan
Sometimes you have to take a loan to service another loan. This is a worrisome state of finances, but sometimes it cannot be avoided. Choosing the right lender, knowing your interest rates, and financially educating yourself are some of the quickest ways to avoid falling prey to unscrupulous moneylenders and inflated interest rates.
Building your credit score
Having a good credit score is the foundation for a smooth borrowing journey. But the first step is understanding what constitutes a healthy credit score and then managing your debt accordingly. Paying your EMIs and bills on time, never missing a payment, and choosing new lines of credit very carefully are some of the ways in which you can ensure a great credit score.
Choosing a good financial app
Banks are known to reject loan applications for the smallest reasons. And sometimes seemingly for no reason. This is where a good financial app can help. Apps like PerkFinance help you save the time and effort that’s required when dealing with banks. With the convenience of getting your salary in advance and paying off automatically through monthly salary debits at very low-interest rates, you can easily build a topnotch credit score very quickly.
Choose financial freedom this Independence Day with PerkFinance.
Download the PerkFinance app or visit PerkFinance to know more.