A Debt Trap is a situation where a person is unable to repay existing debts and keeps borrowing more money, leading to a cycle of increasing debt.
A debt trap occurs when loan repayments (EMIs, interest) become so high that a borrower struggles to manage them and starts taking new loans to repay old ones. This creates a cycle of debt that is difficult to escape.
High-interest loans like credit cards and personal loans often contribute to debt traps. Financial discipline and awareness are key to avoiding it.
"A person uses a credit card, cannot repay fully, takes another loan to pay it, and continues this cycle—leading to a debt trap."