Watch Out for Upside Down Loans

The world is full of things that should not be upside down.  Add loans to the list.

A loan is upside down when the loan balance is greater than the collateral's value.  For example, you might owe more on a home than it is worth.  There are not many attractive choices in this situation.  You can write a check to unload the thing, or you can wait things out as you pay down the loan balance.

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

Further reading:

• How to Calculate Loans