THE DEBT TRAP: Break Free From Financial Shackles And Own Your Life
The debt trap goes in inescapable circles. When trapped in one, you can neither grow nor move forward as stagnancy is bound to happen. This article highlights factors that could lead one to get into debt traps, how to avoid it and when in one, how to escape from it.
image source: Pharos-Tribune
We know the popular saying that ‘Life happens’ and understand that life can get tough at some point. Adamu hides from his landlord whom he owes the sum of twenty-five thousand naira, he goes ahead to meet his neighbor Dele who has a family and also owes another person the sum of one hundred and fifty thousand naira; to lend him some money. Mr. Coals took some loans from loan sharks to stock up his shop, he however did not make great sales enough to pay off his loan, so he went to borrow money from another source to pay off his first loan. Mrs. Arapa depends solely on her salary, when it is exhausted, she buys some foodstuffs, wears and even toiletries on loan, and waits till she gets her salary to pay off her debt. When her salary gets paid eventually, she pays off the debt, stocks her house for the month, settles her bills and the remaining money goes into her upkeep and transportation to work. When the salary wears off, she borrows money again and waits till another payday to pay back. The circle of loans goes on and on, and debts pile up non-stop, leaving no choice of savings or financial growth.
Constant financial pressure arising from the inability to meet debt obligations, or the burden from unending payments of interest can impact one’s overall well-being negatively.
This article addresses what a debt trap is, how one can end up in one, how to get out, and how to avoid it.
What is a Debt Trap?
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A debt trap is a situation where an individual suffers an unending and vicious circle of debt. A circle of debt is a recurring situation of taking more debts to settle previous debts. When you continually take on debts more than you can repay, you take on debts to repay debts, you depend on your paycheck to pay off your debts just to get another one, then you are trapped in debt.
Several factors can lead to falling into a debt trap, they include: