New Delhi, March 17 -- If you stare at a financial crisis and need funds urgently - you will invariably have a temptation to raise a loan. Now with a range of fintech platforms offering loans aplenty, it is highly unlikely not to opt for apersonal loan.

But there is a catch!

Most unsecured loans charge a higher rate of interest, thus putting a lot of pressure on your future income. RBI's latest financial stability report (FSR) 2024 revealed that the share of household debt has risen considerably from 36.6 percent of GDP in June 2021 to 41 percent in March 2024 and later to 42.9 per cent in June 2024.

It is, therefore, imperative to take loan only when it is unavoidable so that you don't gradually slip into a debt trap.

I. Borrow what ...