Are you also falling into a debt trap? These signs will alert you in time, and know the details.

These days, the burden of debt on people is increasing very rapidly. In such a situation, it is important to identify the signs in time that indicate that you are heading towards a debt trap...

Debt Trap Warning Signs: These days, the burden of debt on people is increasing very rapidly. People have started considering buying things on EMI and using credit cards to fulfill their desires, in addition to their needs, as commonplace. Sometimes, purchases are made without thinking. As a result, EMIs pile up every month.

Even with a low bank balance, spending continues with the help of loans and installments. The real problem arises when you don't even realize it. However, by then it's often too late, and you're already caught in a debt trap.

Therefore, it is important to identify the signs in time that indicate that you are heading towards a debt trap. Let's learn about some of these signs....

1. Taking a new loan to pay off an old loan

A person caught in debt is forced to take out another loan to repay the amount of the first loan. This is a sign that the person is caught in a debt trap. Doing this widens the gap between monthly income and expenses, causing the person to face difficulties.

2. Most of your income is spent on paying EMIs

A person caught in a debt trap spends most of their income on paying loan and EMI installments. If you are seeing these signs, you need to be careful. Spending most of your money on EMI installments prevents you from saving.

This prevents financial planning. This indicates that the person is caught in a debt trap.

3. Relying only on minimum payments

Another sign of falling into a debt trap is when a person starts paying only the minimum amount instead of paying the full amount of their credit card or loan. This allows him to avoid immediate penalties, but the principal amount doesn't decrease. As a result, the interest keeps accumulating.

4. No savings after many years of employment

A person having no savings after many years of employment can be a sign of being caught in a debt trap. Either the person hasn't focused on saving and investing, or they are already trapped in a cycle of debt.