With today's loan market, anyone can get a loan at such low interest rates that it is quite easy to fall into the dreaded debt trap. Credit cards, personal loans, vehicle loans, and even home loans are so easy to obtain that customers engage in reckless borrowing without considering their repayment capacity.

To your benefit, we've put together a simple guide to assist you in minimizing your debt burden. These eight principles are some basic actions you can take to get out of debt. Let's get started!

1. Stop further borrowing

2. Be on top of all your loans

3. Make an objective repayment plan and stick to it

4. Talk to your lender

5. Stick to your monthly budget strictly

6. Create an emergency fund

7. Try and earn some additional income

8. Seek professional help if necessary

Doing at least 3 of the items from this list can take you a long way. Good if you can follow all of them. Put this list on your vision board where you can see it regularly and work towards them every day. 

1. Stop further borrowing: 

This is the most logical and most difficult of all. If you are already in a debt trap, it makes sense that you immediately stop any further borrowing. Refrain from making any huge purchases using your credit card; don’t apply for any further loans or credit cards; no matter how attractive the offer looks, exercise utmost control and avoid taking any further credit at any cost. Your priority should be to resolve your current debt and not get further deeper into the debt trap. 

2. Be on top of all your loans: 

This essentially means that you need to gather all information regarding your current debts and liabilities. The total amount due, the EMI due dates, the interest rates, repayment tenure and every other detail about all your debts. This information helps you to plan a strategy to get out of the debt burden as early as possible. This can also come in handy when you are having a discussion with your lender to see the available options. 

3. Make an objective repayment plan and stick to it: 

Once you have collected all relevant information regarding your loans and debts, it’s time to chalk out a plan to mitigate your debt burden; which loans to pay first and which ones to pay later; which loans can be consolidated and which ones can go for a balance transfer. It is time to weigh out all your available options carefully to come up with an objective repayment plan to pay off all your loans. This is the most crucial phase of all, and it takes time to do it correctly. Before developing a debt repayment strategy, conduct extensive research and consult with appropriate experts. Once you've decided on it, stick to it at all costs.

4. Talk to your lender: 

This is another important step that should be part of your strategy. Talk to your lender. You would be surprised at how much the lender can do for your debt repayment. After all, they are the lenders, they can offer so many options to reduce your debt burden and repay your loan amicably. Your lender can offer options like debt consolidation, debt restructuring, EMI moratoriums, interest holidays and other options that can give you some respite from your debt burden. You should use these features prudently to repay your debt at the earliest. 

5. Stick to your monthly budget strictly: 

Many people overlook this fundamental money management step - monthly budgeting. You should begin your monthly budgeting the day you start earning money. Plan out your entire monthly budget at the start of the month and stick to it. It will be difficult, and we will make mistakes in the beginning. However, if you do this on a regular basis, it will become a habit, and you will avoid making unnecessary expenditures that are not in your budget. This will go a long way toward keeping you out of debt.

6. Create an emergency fund: 

While we save for our child’s education and retirement, we seldom create an emergency fund. That is wrong. Every family should have an emergency fund that they can fall back on in unforeseen circumstances. Experts suggest that your emergency fund amount should be equal to at least 6 months of your salary. Make it a goal to have an emergency fund, whether you start saving now or pay down some debt first. As you pay down your debt, you can redirect some of the money you're paying to debt to yourself by setting up an emergency savings account.

7. Try and earn some additional income: 

If you are unable to repay the loan with your current income, you can look at additional income sources to substitute for it. You could, for example, make extra money by selling assets from your home, beginning a side job, or earning money from your hobbies. You might be able to earn more money at your full-time job if you negotiate a raise or work additional hours.

8. Seek professional help if necessary: 

Recognize and accept when you are in desperate need of assistance. Even after doing all of the above efforts, if you are still unable to manage your debts, it is time to seek expert assistance. For a nominal price, you can contact a debt relief or credit counselling company that will help you handle your debt properly. When you realise that the matter has gotten out of hand, there is nothing wrong with seeking professional assistance.


Debt is a dangerous game. We all want to be good borrowers by making timely payments, but some of us end up on the lender's records as a "bad debt." Debt management is a deliberate procedure that continues until every last penny of your debt is returned. Disciplined money management is the key to good debt management. Remember, you should never borrow more than you can afford. It is usually preferable to save for your necessities than take the easy route of getting a loan


  1. Can I get professional help for Debt Settlement?

Without a doubt! There are a lot of debt settlement negotiating agencies that can help you with this.

  1. Can the lender help me with an interest discount on my debt?

Yes, you can talk to the lender and arrive at an amicable debt settlement agreement to repay your loan. However, whether the lender agrees to or not is solely at their discretion. 

  1. What will happen if I don’t repay my debt? Will I go to jail?

Defaulting on a loan is not a criminal offence so you wouldn’t go to jail. Legal proceedings shall be initiated against you and the court may order for your assets to be salvaged against the loan amount. 

  1. Can I get out of debt with no money?

You have the option of using the snowball or avalanche approaches. Here, you'll utilize additional money to pay more than the minimum monthly payment on one loan until it's paid off, then apply the monthly payment from that obligation to the next one.

  1. Is my debt forgiven after 7 years?

No, it is not. An unpaid debt falls off your credit report after 7 years. It won’t have any effect on your credit score after that. That necessarily doesn’t mean that the debt is forgiven. You still have to repay it.