How to Get Out of the Debt Trap? | Personal Finance Guide

A Debt Trap is a situation where loans and EMIs become unmanageable and start controlling your life. If corrective steps are not taken in time, things can spiral out of control. Many people fall into this trap by taking new loans to repay old ones, which only worsens the problem. In this article, we will discuss how to get out of debt, mistakes to avoid, and how you can make a fresh financial start. 1. Step Down Your Lifestyle The first and most important step to escape debt is to control your expenses. Switch from car to two-wheeler or public transport. If a big house is not affordable, move into a smaller apartment or rental. If business is not running, take up a smaller business or even a job. 👉 Downgrading your lifestyle is the key to managing EMIs and expenses. 2. Stop Paying Loan with Loan The biggest mistake people make is taking a new loan to repay old debt. If EMIs are higher than your income, stop taking more loans. Create a plan that fits your real earnings. 👉 Taking loan after loan only pushes you deeper into the Debt Trap. 3. Avoid Private Money Lenders Private moneylenders offer loans at very high interest rates and often resort to threats, harassment, or even blackmail. Do not fear them. Clearly say: “I will repay gradually, but harassment or force won’t get you anything.” 👉 Always borrow only from banks or authorized NBFCs. 4. Sacrifice Assets – For a Fresh Start If debt is too high, consider selling or mortgaging your assets (car, jewelry, property) to clear loans. This will reduce your EMI burden. The remaining money can help you start a small business or a new source of income. 👉 A small sacrifice today can save your life tomorrow. 5. Change Your Mindset – It’s a Test of Life Debt is not permanent; it’s just a phase of life. Stay patient and consider it as a life test. Don’t slip into depression. Stick to a clear plan and repay slowly. 👉 Courage and confidence are your biggest assets in this journey. Conclusion Escaping a debt trap is tough but not impossible. Control your expenses. Stop taking unnecessary loans. Avoid private lenders. If required, sacrifice assets for peace of mind. Remember – Money and property can be regained, but if you lose courage and confidence, you won’t be able to stand again. FAQs (Frequently Asked Questions) Q1. How can I get out of debt quickly? 👉 Reduce EMIs, cut expenses, and create extra sources of income. Q2. Is it safe to borrow from private moneylenders? 👉 No, because they charge very high interest and often use illegal methods. Q3. What if the bank is pressuring me for repayment? 👉 Talk to the bank about Loan Settlement or Restructuring to manage EMIs.