A debt trap in Class 10 (Economics – Money and Credit) means a situation where a borrower is unable to repay a loan and ends up taking more loans, getting stuck in a cycle of debt.

Simple Class 10 Definition

For Class 10, you can write:

A debt trap is a situation where a borrower is unable to repay existing loans and is forced to take new loans to repay old ones, making it very difficult to come out of debt.

In NCERT-style answers, it is often linked with farmers or poor households whose income is not enough to repay what they borrowed.

How it happens (Class 10 style)

  • The borrower takes a loan (often at high rate of interest).
  • Income is not enough, or crops fail, or business fails, so they cannot repay.
  • To pay the first loan, they take another loan.
  • Interest keeps increasing, and the person becomes worse off than before.

You can remember it as: “Loan lene ke liye bhi loan lena pade – that is debt trap.”

One exam-ready answer (2–3 lines)

You can directly use something like this in Class 10 exams (and shorten if needed):

A debt trap is a situation when a borrower cannot repay a loan and has to take fresh loans to repay old ones, leading to a continuous cycle of borrowing and increasing burden of interest.

Information gathered from public forums or data available on the internet and portrayed here.