A Personal Loan can turn into a debt trap if borrowing becomes repetitive or replaces proper budgeting. This usually happens when people take one loan to repay another or rely on loans for routine expenses. In India, high interest rates and overlapping EMIs can quickly reduce financial flexibility. The loan itself is not the trap; poor borrowing habits are. When income remains stable and EMIs are manageable, Personal Loans are repayable. Debt traps form when borrowing continues without addressing underlying cash flow problems. Avoiding multiple loans and planning repayment clearly helps prevent this situation.