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Debt Traps - Coggle Diagram
Debt Traps
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When a person is unable to pay back a loan, they may find themselves in a challenging situation known as a "debt trap".
In the first statement, a debt trap is described as a situation where a person is unable to repay their loan and is forced to borrow again, resulting in a cycle of debt. In the second statement, the nature of loans is discussed, where both the principal and interest must be paid off through a process of gradual repayment known as amortization.
If you can't make your loan payments regularly, you will default and become trapped in a cycle of debt. As a result, the principal amount owed will not decrease, and the interest will continue to accumulate, making it extremely difficult to repay the debt.