How Upside Down Loans Work

Most things in this world are not meant to be upside down. This includes your loans.

A loan is upside down when the loan balance is greater than the collateral's value. When this happens, you've got trouble. You'll have to write a check to unload the thing, or you'll have to keep paying down the loan until you can get out from under it.

Find out how loans get upside down, how they go away properly, and what you can do to avoid upside down loans.

If you've been in this situation before, tell us about your upside down loan nightmare in the comments below.