ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Ability to pay back loan
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Extravagance
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None of the above
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Increasing debt
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Detailed explanation-1: -A debt trap means the inability to repay credit amount. It is a situation where the debtor could not be able to repay the credit amount.
Detailed explanation-2: -Debt trap is a situation where the debtor will not be able to repay the debt incurred. Debt trap situation may arise due to the higher interest rates or change in terms and conditions of debt incurred. Normally, debt trap will result in default of payments or bankruptcies.
Detailed explanation-3: -Having multiple loan EMIs and credit card bills to clear and not repaying them could lead you into a debt trap. On the other hand, being completely debt-free could have a negative impact on your credit score.
Detailed explanation-4: -A ‘debt trap’ means overspending till no money is left. Ans : False.