However, as the old saying goes ‘Better safe than sorry’, one should try as much as she/he can to avoid this mess. After all a recovery agent is introduced into the picture because a borrower slipped up. There could a variety of reasons for the same: overspending, over borrowing, a personal crisis (sickness, loss of employment), or pure bad luck (a loan repayment cheque lost in the post). But at the end of the day you need to take responsibility for financial indiscipline. It is imperative that the borrower not deny that he/she owns money to the bank as that would not solve the problem.

Rather the borrower must accept his folly and offer to help closely with the bank to return the loan. Helping a borrower, there are a growing number of financial counselling centres that offer free service to those caught in the debt trap.

Banks are also doing their bit to avoid this situation. They send periodic alerts on payments due via SMS or email. Autopay (or direct debit) is also an easy way to avoid oversight on loan repayment cheques.

However, the most basic common sense says, never borrow more than you can comfortably repay. Sadly, this common sense is increasingly becoming uncommon. And this is causing all such problems!