While many borrowers are thankful for the easy application process of personal loans, some have fallen in the trap of over-dependence. These borrowers are caught in the disastrous cycle of constant loan application from loan companies, hoping to fill their lives with ‘financial band-aids.’ A debt cycle is a stressful ordeal and it can take a toll in health and sanity.
Are you fond of using personal loans or bpi credit cards as your ‘personal crutches?’ Do you want to get out of the habit of using one fast cash loan to pay off another? In this case, you should take note of the following strategies:
Create a Long-term Financial Plan
A long-term financial plan can help you for the coming years. It will not just solve your debt problem but can also help you implement the financial strategies needed. To create a long-term financial plan, you have to be honest with yourself. Better yet: discuss it with your family. Point out all of your income sources and expenses. Afterwards, determine how you can get out of debts.
Limit Your Luxuries
Overspending is one of the main reasons why borrowers are falling heavily on the debt cycle. They tend to buy stuff they don’t need such as gadgets, fancy appliances, unhealthy food, subscriptions, and jewelry. Instead of using cash loans for emergency purposes, the borrowers splurge like there’s no tomorrow.
To snap out of salary loan dependence, you should limit your luxuries. Figure out the things you don’t need and remove them from your budget. Focus on the things that really matter.
Apply for Loans Only Twice a Year
You cannot avoid loans unless you’re really swimming in cash. Whenever something happens, a quick cash loan can get you out of your dilemma. Since you’ll need personal loans one way or another, you should just put a limitation. One or two loan applications per year will do. This can be a real challenge especially if you’re used to having multiple loan transactions per year. But if you can adhere to this limitation, the positive financial change is undeniable.
Have Multiple Sources of Income
If you are employed but pinned down by multiple loan obligations, things can be hard for you. Aside from making strict budget cuts, you should also consider getting new income sources. Since there are hundreds of online platforms that you can rely on, there will be no shortage of projects. Just be patient because competition can be high.
Loan over-dependence cannot be resolved overnight. It’ll take time to remove this habit framework from your system. But you mustn’t give up! Discipline yourself and understand the real purpose of personal loans: emergency solutions.