How To Get Out of a Debt Loop
posted on Aug 2, 2021 | 536 likes
How to stop struggling with debts
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If you find yourself having to borrow in order to cover costs incurred by repayment of other loans… you just might be in a debt loop!
Finance, like life in general, is often considered unfair. The richer you are, the easier it’ll be for you to hold on to your money.
The more you’re struggling with debt and budget issues, the worse those issues will become.
Subconsciously, our life forms patterns from what it goes through routinely in order to fulfill certain things.
Yes, one financial mistake or slide, whether it’s something you could control or not, can set you up for an unfortunate financial cycle.
So, how do you identify that you are in a debt loop and can you escape it?
Let’s dig in.
What is a debt loop?
Let’s take a very common example.
Paul didn’t have his house rent ready on time, so when the landlord came for it, Paul had to borrow money from Peter with the agreement that he would pay back at the end of the month.
It’s month end, and somehow, Paul is not able to make the re-payment to Peter as agreed.
After Peter threatened Paul with the Police, Paul had to take a loan from Damilola to offset Peter.
Are you seeing the pattern?
It happens that every time Paul has to fill one hole (financial gap), he has to dig another.
Remember that every other day, his daily essentials will definitely creep in, hence, what he needs to cover up will always be more than what he owes.
This is a debt loop.
Now how can you escape it?
Realization: Accept That You’re In A Dept Loop
You can’t fix a problem until you acknowledge its existence.
This is not only the first best way to get out of it, denial or not recognizing how serious the problem is, is a major reason why it gets out of control.
While it can be difficult to admit that your finances have gotten out of hand, this is the first step to getting yourself back on track.
2. Plan An Escape Route
Chances are that you never planned to get into this loop in the first place, well if your goals contradict this, then you have to review your goals, it’s time to make some changes, it’s time to get an escape plan.
Let’s examine Paul again, this time he just got an admission into the University, but instead of choosing courses carefully, he started doing a few random courses here and there hoping to meet the graduation requirements in 4 years.
Well, he won’t graduate.
Now let’s apply that concept to your finances. If you do not have a blueprint that directs your financial activities, you will not make progress.
It’s important to take a good, long look at your finances, review your expenditures and see if you can find areas where you can downsize to free up some funds to make more sizable payments on your debt.
If there aren’t any places where you can cut back, many times this signals a cash flow problem.
Consider ways to increase your income, whether it’s taking more hours at your current job, looking for different opportunities, or taking on a side job.
Use your extra income to make payments on your debt.
3. Get Help:
As we’ve seen above, it is not a palatable decision to admit that you have crashed inside a dept loop, however, you need to understand that sometimes, if you do not get help, you may never come out of it.
You see, finances aren’t just about numbers, there are a lot of emotions attached to money.
Reaching out to a financial expert or someone you trust and confide in, can greatly increase your chances of successfully navigating the hurdles you’re facing.
A financial institution like Page, can also help you consolidate your debts so that you can streamline the repayments and reduce the stress associated with managing multiple debts.
If you want to talk to us about debt consolidation, please reach out to us on 017007243 or send us an email at customer@pagefinancials.com. Our support is available all round the clock to attend to customers.
Conclusion
The psychological stress associated with a debt loop is as hazardous as the debt loop itself – if not worse. It can gradually derail your mental health and lead to depression if not managed on time.
That is why it is important to us at Page financials, that aside making funds available to our customers when they need it, we also encourage our customers to practice healthy financial lifestyles that would support their financial goals.
You can speak to a financial expert at Page for free by calling 017007243 or sending an email to customer@pagefinancials.com
Visit our blog at https://pagefinancials.com/blog for more inspirations on how to take charge of your financial life.
Also, learn more how we assist salary earners in Lagos and Ibadan to access quick loans of up to N5M conveniently.
Call 01-700PAGE (7243) or send an email to customer@pagefinancials.com to speak with us anytime of the day.
Follow Page Financials on Facebook, Instagram, Twitter, and LinkedIn to get daily inspirations on how to enjoy live. We want to help you live life to the fullest.