How to get rid of the debt spiral?

People have the reputation of a conscientious and frugal people – money is saved and debts are paid off. Nevertheless, the indebtedness has increased since the 1970s and continues to grow. At least 9% of adults are heavily indebted. People may have dozens of different loans before they venture into the debt spiral.

What is the cause of over-indebtedness?


There are many ways to get indebted, but what is common to the stories is that life has not been adequately prepared for from an economic perspective. Some people take debt out of necessity for everyday expenses, others apply for a loan at the whim of a certain purchase, and some seek to constantly raise their standard of living with a loan.

The debt spiral can get into whatever your income level. People often seek to optimize their finances to suit their current lifestyle. Debt settlement can, therefore, run smoothly until there is a turning point in life, such as divorce, illness or unemployment.

Although the above-mentioned changes in life are common in people’s lives, they are not thought to fall into their own place. For example, divorce causes people to move apart, which often entails additional costs when the spouse is no longer sharing the cost of living and other bills have to be paid for alone. Often over-indebtedness starts with crises or life changes that have not been prepared well enough in advance.

How to reduce the risk of over-indebtedness?


There are many ways to reduce the risk of over-indebtedness. When borrowing, it is always worth thinking about how to prepare for sudden life changes that affect the economy and your ability to pay.

Before taking on a debt, you should consider whether it is reasonable and necessary. It is good to remember that there are always higher risks when using a high leverage. If you take on debt, you should also be prepared for a decline in your own ability to pay and for interest rates to rise above your own financial capacity. Before you take out a loan, it is also a good idea to look at the total cost of the loan with a loan counter. This can reduce the risk of over-indebtedness.

How to get out of the debt spiral?

Applying for help

The key to getting out of the debt cycle is facing your own situation. You need to be able to look honestly at your own life management and get to the things that have caused the debt spiral. It’s not always easy, because people’s finances often consist of many small pieces.

The earlier you become over indebted and seek help, the easier it will be to find out. Take a critical look at your finances as soon as the first payment reminder arrives. It is a sign that the economy is no longer in full control. Get help at the latest when you need to finance loan repayments with new loans.

You can get help with your situation, for example, from the Municipal Debt Advice Center or the Guarantee Fund. It is a good idea to seek professional help, as an expert can tell you what to do next. They can also provide support for life management, which is the most important thing in resolving the situation. Openness about one’s own situation is also important for resolving the situation.

Loan consolidation


An arrangement loan can facilitate the life and financial management of an indebted person. A structured loan combines several different loans into one, which makes it easier to manage your own finances.

The benefits of a structured loan also include a personalized loan as well as a reduction in loan costs and interest charges. Monthly repayments for a variety of loans can be up to $ 1,000, which is a large amount for most people. A structured loan can halve the amount.

A person in debt can apply for loan consolidation under certain conditions.

Read about the arrangement loan more. However, a mere mortgage loan alone does not solve the situation. Most importantly, the causes of indebtedness must be addressed and the underlying problems resolved. If you do not change your lifestyle and take on more debt, it may soon be the case that in addition to new loans, there is also the burden of a large restructuring loan. Therefore, it is necessary to change one’s own consumption habits.


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