Having too much of debt he is a common problem faced by a lot of people in UAE today. Debt can be crippling because the deeper you get into it the harder it is to get out of the issue. The problem is complex; in fact having a lot of debt especially unsecured debt like credit cards can lead to bankruptcy, the defaulter can be subject to both criminal and civil liabilities in UAE. Visit http://www.smlawfirm.ae/ to know more about debt counseling.
Know about Good debt
A good debt can be described as money borrowed from our revenue sources for net necessities such as to pay the college fees or home loan. But bear in mind not to borrow more than what you can afford to pay back, and always look for the best rates.
know about Bad debt
And when you cannot afford to pay off your monthly bills regularly, don’t use credit cards to purchase things such as meals outside and costly vacations. Using credit card is one of the quickest ways to fall into debts instead accumulate cash every month for these items and pay these bills in full.
Keep a tab on your spending
Most people spend thousands of the dirhams in Dubai shopping malls without again thinking about what they are buying and if the product is useful for them. Cut back on things you don’t need and start saving or put it in reducing your debt.
Clear your highest interest debt on priority
don’t just pay the minimum amount on credit card bills as it barely covers their interest, target to read use the principal amount.
Don’t take heavy loans
though taking a home loan or borrowing to pay off your debt can be an easy solution but comes with its own risks. In cases when you are not in a position to repay the home loan you may have to lose your home or take a back step on investing for your retirement.
Plan an emergency fund
Always plan for a back up of 3 to 6 months of cash needed for your living expenses in case of emergency. Without an emergency fund, any unexpected expenses can disturb your finance situations.