Festivals in India are about more than just celebrating; they also involve a lot of shopping, buying, and other activities. Brands launch different programs such as discounts and cash-backs to capitalize on the festive atmosphere and attract clients.
Buying products on credit may provide immediate gratification, but it also establishes a responsibility to pay the loan out of future earnings. So, while buying anything on credit or with an equated monthly installment (EMI) may appear to be a good deal, doing so regularly may put you in a lot of financial trouble in the future.
As a result, it’s critical to limit your desires and spend within your means to ensure that you have enough money to spend throughout the holidays to provide joy to your loved ones.
Here are some tips for managing debt and avoiding debt traps while paying EMIs throughout the festive season: –
- Your savings are your lifesavers. This is the first place to start with. Firstly, pay all your debts with the high interest rates.
- To properly manage your debt, stick to a strict budget and prepare for an emergency fund so that you can fulfill your financial responsibilities on time.
- Consolidate all of your loans into a single loan to take advantage of low-interest rates on large sums.
- Reduce the loan’s term and the EMI amount will immediately reduce.
- Set up monthly bill payment reminders to save time and money.
- Pre-payments are a great alternative to traditional EMIs. Why? Because the principal amount reduces, the interest amount decreases as well.
- Avoid credit card rollovers since they come with exorbitant interest and fees.
- Use no-cost EMI or simple EMI choices to save money on interest while also paying off the loan in modest quantities that are easy on the wallet.
- Spending money on things that aren’t necessary, especially over the holidays, is a bad idea. During festivals, lenders create various incentives to entice new consumers. Individuals will be obliged to return these obligations on time, thus caution should be exercised while selecting such an offer.
- To avoid delays and late payments, plan beforehand. Failure to do so results in additional financial costs such as late fees, punitive interest, and so on.
These are some methods for strategically breaking away from this rut.