Accepting Answers...
   « »

What is a debt trap? Mention any two factors responsible for debt traps?


Posted- 1981 days ago
4 Answers

Answer This
Best Answer
When a person has to take another loan to pay back the previous loan , it became difficult for him to came out from that situation. Such a situation is called Dept Trap. Factors responsible are:- 1)High Interest Rate From Informal Sector. 2)No Source Of Regular Income.
 

when somebody is under great debt and cannot escape it without selling nay of his possessions its a debt trap/

..

high interest rates.

unstable income of people

 

When a person has to take another loan to pay back the previous loan , it became difficult for him to came out from that situation. Such a situation is called Dept Trap.

Factors responsible are:-                                                                           

1)High Interest Rate From Informal Sector.

2)No Source Of Regular Income.   

 

When a person has to take another loan to repay his earlier credit or he has to sell his possessions to meet the needs he has to face aterrible situation called debt trap.

Many factors are responsible for sush situation:

Taking credit from in formal sector on a higf rate of interest

 No/ les source of income.