Your Money: How can you climb out of a debt trap?

Easy credit is pushing more Indians into financial distress, with 58% of aggregate household debt in India comprising non-housing retail loans.

A typical debt-trap profile is a young earner up to age 35, earning ₹40,000-45,000 monthly, with ₹5.5 lakh in delinquent debt across six or seven credit lines.

Borrowers often start with bank loans, then move to app-based lenders charging APR of 300%-400% as creditworthiness declines.

The story of Bhuvanaa Shreeram illustrates how multiple loans and credit cards can lead to a spiral where income fails to cover EMIs, requiring gold pledging for medical emergencies.

Financial experts outline five steps to regain control and reduce debt burden, including strategies like debt consolidation and budgeting.