‘Credit cards are dangerous things to get involved with’

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Debt in India has grown a lot over the past few years. A large part of the growth could be attributed to people having taken personal loans, house loans and credit cards. This has caused a flutter in the Indian debt market, as a lot of people who had taken home loans are now in trying positions. The rise in interest rates have left people unable to cope with higher EMI's, forcing people to take more loans, slowly forming a vicious circle.

Subprime loans in India are in fact well over Rs 20,000 crore. Another thing that people don't realise is that the interest rate charges on credit cards are extremely high. This again leads to people who like to revolve their credit and pay the minimum due only with a large debt at the end, which they do not know how to handle. This has caused banks to increase the due diligence involved in lending, and in current times loans are harder to come by.

Credit cards are especially dangerous things to get involved with as they charge a person anywhere between 36-49% interest on an annualised basis. Here we try to educate and help people the best we can, so that they may come out of this debt grip unscathed. We try to look to see if people have any securities that they may pledge and get low interest loans against them, with which they may be able to pay off their outstanding debts. If this is not sufficient, then we would suggest mortgaging immovable assets to receive a long-term pay back period and swap loans to this low interest plan.

Also, now-a-days, banks are agreeable, given the current situation, to review loan applications to lower the EMI to a manageable amount and increase the loan tenure. Some banks that charge fixed rates of interest also end up making a lot more money on the loan. People are trying desperately to come out of debt and banks want to get back their money. However, there are no intermediaries between the two parties and an organisation like us hopes to fill that gap.

Education, understanding how loans and interest rates work and learning financial management are essential to survive in these financial times and days of debt. We are hoping to help people in all of these aspects and we do so free of charge.