Dubai: Mohan Kumar, 52, a victim of financial mismanagement turned up at the Indian Consulate on Friday evening with the hope that he could find a magical solution to wriggle out of the deep mess he is in.
Dozens of credit cards and personal loans that run into an outstanding amount of Dh80,000 are all what the sterilisation technician has earned in his nearly three decades of residence in Dubai.
Similarly, Sangeetha H. and her daughter Shradha heaved a sigh of relief that the financial tangles are finally loosening around their necks.
The financial open house held at the consulate auditorium between 8pm and 10pm had a panel of financial experts patiently listening to problems and offering solutions.
"I feel that I have got solutions for at least some of my big problems after listening to the advice of the panel members. I wish the consulate had something like this a few months ago so that we would not have reached a situation like this," said Sangeetha whose husband ran into debt after his business of constructing swimming pools collapsed.
The financial open house was conducted to offer professional help to Indians who are in financial and legal trouble with banks and other lenders. Savera, an alumni association of the Indian Institute of Management (IIM) volunteered their expertise to more than 150 people who turned up to seek help. In addition, legal experts, psychologists and social workers were also at hand.
In a presentation highlighting the pitfalls of using credit cards, the audience was reminded that a credit card is the most expensive form of taking a loan with a 36 per cent annual interest rate.
"By using some basic financial principles, if you restructure your debt, for instance take a personal loan at an interest rate between 12 and 20 per cent to pay off your credit card, you can bring down your monthly instalments to a manageable level," said an expert. Dissuading people from absconding due to debt, the expert noted that it is much easier to deal with the issue being on the right side of the law.
The impact of financial stress can lead to relationship issues, health and behavioural problems, warned Sailaja Menon, psychologist at the Dubai Community Health Centre.
Sanjay Verma, the Indian Consul General said the consulate is planning to expand the service to other emirates depending on the response from the community. "This initiative will also be offered through the media and we are lining up a live radio show on Spice Radio," he said.
Pitfalls of credit
- Don't use credit cards to make everyday purchases.
- Don't use credit cards to buy vacations or go for weddings you cannot afford.
- Don't fall for advertising that tempts to you to spend beyond your means.
- Don't use credit cards for impulsive buying. Differentiate between wants and needs.
- Clear debts on credit cards as early as possible. Don't make minimum payments and carry on the debt.
- Do not withdraw cash using credit cards
- Do not default on monthly payments.
- Stay within 25 to 30 per cent of your credit card limit.
- Out of all debts, clear credit cards first and foremost
- Pay off the highest interest rate credit cards first.
- Read your monthly statements carefully
Do you think such initiatives would help people in debt? Have you noticed a rise in stress-related illnesses due to mismanaged finances? Would you welcome such workshops in your city?
