The main objective of this study is to review the literature on the causes of indebtedness based on previous studies which were done on indebtedness. Household indebtedness is characterized as the inability to cover existing financial commitments even when current and foreseeable resources are utilized, without lowering one’s basic standard of living. The review of literature shows that in many studies, indebtedness is significantly influenced by financial illiteracy, physiological and behavioral factors such as attitude and personality traits as well as demographic factors such as income, education level, gender, age and ethnicity.