7 Best Escape Routes from Debt in the UAE
At the time of necessity (and sometimes luxury), a personal loan can prove to be a support system. However, getting easy credit may also lead to a mistake in your judgement, which may eventually lead to excessive debt.
For a few years, the residents of the UAE have been exposed to long-term risk as they have been obtaining credit cards, personal finance, and other forms of which they ultimately find hard to repay.
Now, if you are stuck under a huge pile of debt including personal loan in Dubai, and stressed about how to escape from it, don’t worry! We have got you covered. We have listed a few tips for you to manage your debt.
Prepare a List of All your Debts
The very thing to do is to write down all the debts you have to repay. It will help you in determining how to go forward with the repayments prioritizing as per their importance. You will have to go through the terms and the rates as set by your bank or financial institution. Through this, you can access the debts, which are to be kept on priority and have to be cleared first based on their severity level.
After you have kept a budget aside for your daily costs, then you can meet the loan repayment and bill demands as per the order of your list of financial obligations. It is recommended that you repay the debt with the highest rate of interest first. In case you have more than one debt with a high rate of interest, make repayment for the one that has the lowest outstanding balance first.
Try to Earn More Income
You can look for ways of earning more money, either by taking a second job or selling the items that are unwanted. You can use the extra funds earned for taking care of your debts.
You may also go for a freelance job for some extra earning, which can be used for clearing off your debts in the UAE.
Learn from Your Mistakes
It is necessary for you to understand that not all debts are evil. If obtained in moderation and handled well, some debts can be helpful too, such as credit cards or personal loan in UAE.
The debt, which is managed cautiously may provide you with financial assistance in meeting your life goals and ambitions like making payment for your kid’s education or for your wedding. The trick is managing the funds you borrow wisely and making sure your finances stay in control.
Do Not Avoid your Debt
If you end up paying half of your salary for clearing your debt, now is the time to stop & think. The worst part of all this would be ignoring the problem, as it ultimately gets worse. Having a debt in the UAE is considered quite different as compared to other countries. In the UAE, it can be treated as a criminal offense that might result in a jail term.
Ignoring the debts, you have accumulated is probably the worst thing you can do. Do not run away from your problem, rather tackle it head-on if you face escalating debts. This will help you to avoid your financial situation from getting worse.
Keep a Track of Your Spending
After you have planned on how to deal with existing debt, it becomes important to track your expenses for making sure that you try to avoid the accrual of debt any further. It is recommended that you maintain a monthly budget, keeping in mind your necessary payments as well as regular expenses.
Then, you can organize your spending according to your budget. This will help you to identify the areas where you can avoid spending, and use those funds in more pressing areas.
Saving money on unnecessary expenses will help you in bringing your financial condition under control in the long run. After you have prepared an organized plan, you may become capable of determining a regular allowance, and find out the ways of saving more.
Contacting the Bank
The quicker you start taking care of your debt, the quicker would be its repayment. However, it can turn out to be a complicated process sometimes. Here, the communication with the concerned bank becomes important.
When you keep a constant touch with your bank, you can construct a plan for meeting your obligations effectively. You may be able to consolidate all your debts into one, which is more manageable and a better solution for payment.
Usually, your bank will try to come to some kind of compromise such as suspending the repayment of interests for some time. It is dependent upon what you are putting on the loan, for instance, your assets or your income.
Nevertheless, at the end of the day, what is important is one on one meeting with the concerned bank and requesting them for a payment holiday. And if possible, explain the situation to them and put forward a request for extending the loan tenure.
Tell the Truth
If you plan of clearing off your debt, then you must remain honest with yourself as well as your lender. Always tell your lender the truth and give them their best chance for helping you out.
In a Nutshell!
If you are not good at managing your finances well, then there are chances of you getting stuck under a mountain of debts. With the current lifestyle, avoiding borrowing funds has become very difficult. Credit cards and personal loan in UAE have become very common amongst the residents. However, if managed well, then the debt is not that big an evil as it sounds.