How debt affects your life and six ways to repay it

How debt affects your life and six ways to repay it

Your emotional and physical health are impacted when you are aware that your debt, whether it be from unplanned purchases, shopping binges, or medical bills, has gotten out of hand.

Despite the fact that paying off any debt gradually and methodically may seem difficult to you: Here is a tutorial on how to pay off any form of debt, including your own, even when it seems impossible.

Learning how your credit rating functions and why debt can be particularly harmful is the first step.

What role does debt have in CIBIL scores?

You should first realise that debt affects every aspect of your financial life, including your credit scores. Paying back your loans on schedule is crucial. Your bank’s employees will notify the credit bureaus if you miss even one payment. Your CIBIL score will suffer if you make the tiny error of skipping a payment. If you have a low CIBIL score, the bank may reject your application or you won’t be approved for a new loan.

If you’re among those who are caught in a debt cycle, admitting that there is a problem is the first step toward solving it. List all of the loans that are still due, then start budgeting. You could then plan more effectively and pay off your debt more quickly.

If you feel pressured about unpaid bills, you should use these methods to pay them off.

1. Pay off high-interest debt quickly

If you have a lot of debt, decide which loan needs to be paid off first, such as a credit card or a personal loan. This kind of approach aids in minimising total interest paid on all loans. Some loans may provide you with limited tax advantages, lowering the true cost of the borrowing. (Specific to student and mortgage loans)

2. Increase repayments when income rises

The fastest way to pay off your bills is to do this. You can easily increase the EMIs by 5% if your source of income rises. You can reduce interest payments significantly by increasing your EMI payment as soon as you can.

3. Switch to EMIs

The simplest way to pay for expenses is with a credit card. However, if you use your credit card carelessly, your expenses could burn a hole in your wallet. Despite the fact that many credit cards provide approximately 50 days of interest-free periods. However, if you roll over the payments, the interest that accumulates might reach 35% annually. Convert the balance of your credit card debt into manageable instalments if you are having trouble paying it. Make sure you don’t miss any EMI sessions at that point.

4. Seek professional assistance

Do not be reluctant to seek expert assistance if you are unable to resolve your debt problems and find it tough to manage them. You can always seek out the advice of a debt management professional if you are experiencing a serious financial issue. To settle your debts on your behalf, a debt management counsellor will negotiate with your creditors to accept a single, lower monthly payment.

These negotiations typically involve reduced interest rates, the elimination of late payment fees, or possibly a loan restructuring.

Most of the time, debt management companies just charge a little service fee for resolving debt. The sum is determined by the size of your loan.

5. Change one’s way of life

Due to past-due credit card costs, you must bear the pressure of repaying your obligations. You will be able to pay off your debts more quickly if you cut back on or eliminate some of your costs. Avoid frequent money wasters like weekend gatherings, dining out, and movie theatres.

6. Think about debt relief

You can consolidate numerous minor bills into one loan by using debt consolidation. Repayment conditions are better with debt consolidation, including lower interest rates and manageable EMIs. Additionally, because there are fewer payments to manage and return, it makes it easier for you to keep track of your entire debt and streamlines the payback process.


In the end, having a debt load is not at all shameful. Debt traps are stressful and can have a detrimental mental impact. But with a little forethought and honesty, you may avoid the grasp of creditors and lead a stress-free life. To help you pay off your obligations from your income and achieve financial freedom, think about speaking with a debt counsellor.

The last thing you want to do is stop making payments on your debts if you are having trouble repaying them. This may result in harassment from recovery agents and negatively impact your credit score. A debt solution is always available if you believe you are unable to pay your EMIs.

The writer is Founder of SingleDebt.

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