Two strategies to avoid a debt trap during job loss and dwindling income

The avalanche will save you money, but the snowball approach is easier to stick to

The pandemic and the consequent loss of jobs and reduction in business incomes have led to an increase in household debt. According to a March 19 release from the Reserve Bank of India (RBI), the household debt-to-GDP ratio rose from 35.4 per cent in the first quarter of 2020-21 (Q1FY21) to 37.1 per cent in Q2. Add to that the easy availability of loans via apps, and the chances of falling into a debt trap are perhaps higher today than at any time in the past. If you are caught in such a situation, adopt one of the two strategies