Negative Equity Trap; Never Miss Payday Loan Payments

There can be multiple reasons to acquire a loan such as to meet educational, medical or domestic expenses but the type of loan required depends on the circumstances in which we want the loan. For those who require an amount of $2500 or less, payday loans might be a good option. These loans are especially suitable for people who don’t have a good credit rating.negative equity trap

Payday loans are basically short-term loans that are taken against earnings and are expected to be paid back as soon as the paycheck is received. To become eligible for the loan, a proof of earning for at least three months, along with the proof of age being more than 18 years is required to be submitted. Payday loans are suitable for unexpected or emergency purposes only and are not appropriate for long-term use.

Secured Loans for long-term Needs:

For longer period of time, secured loans are the best choice. It is also suitable for those with a bad credit rating. As it a secured loan, it is a better option for those with a home as the lenders lend their money against the equity in a home. The home can be either mortgaged or fully owned, but the loan is provided on the basis of such a home. Secured loans offer low interest rates and the repaying time period is also quite long extending for even up to 30 years. The lending company representative provides the loan on the assessment of the house. There are many lenders, who lend as much as 125% of the valuation of the house, others may settle at 85% of the equity value.

Negative Equity Trap

However, there is a problem with such kinds of loans that the interest rates may rise and fall with the value of the property, i.e., in case the value of the property decreases, the interest rates will increase and the homeowners will find themselves trapped in a negative equity which increases the amount of repayments.

You might also like

Payday Loans (Cash Advances) Explained As the name suggests, a payday loan is a fast and easy method to get loan in a single day to meet your...
Negative Equity Equity is an accounting terminology and it means that sum of all assets that you have, including your...
Negative Amortization Negative amortization is a phenomenon in which the principal balance on a loan increases every month,...
Getting a Same Day Payday Loan You must have a solid income and a checking account for same day payday loans. You can apply for same...
Negative Equity AFfects Foreclosure In a situation where the home owner owes an amount on mortgage which is more than the current value of...
Debt Consolidation Companies

People who liked this Post also read

  • Loan with No Credit Checks
    "I have bad credit but need a loan" is on every borrower’s mouth now a day. Many organizations, lenders still offer loans with a poor credit on certain conditions. They include: doorstep lenders, pawnshops, family loans, payday stores, weekly payment stor...
  • Easy Cash Advance from a Payday Loan Lender
    Fast cash payday is a very essential tool for those people who have been rejected for loan by banks. Its requirements are so easy and could be completed by any individual. The interest rate is high but that is ok because the fast cast payday get an indivi...
  • How to Get Out From Under The Payday Loan Trap
    The foremost thing that you can do to avoid this payback mess is, don’t apply for a loan in case of financial need. Think of some other alternatives. Apply for the loan in case if you find nothing else. Then follow some tips to get rid of it as soon as po...
  • 0% Down Payment Era Has Come to an End
    The facility of zero percent down payments for homes virtually does not exist anymore. In the nine major cities of U.S, the banks have increased the rate of down payment by 22%. This has declined the interest of people to acquire home loan. This has also ...
  • DSS Crisis Loan Alternative for Low Income
    The criteria set for the applications of a DSS loan tend to be very high. Therefore, if you have been rejected then do not feel let down as there are various other options which you could consider. Often the government tends to help out the needy and the ...


is an experienced journalist.

One Response to “Negative Equity Trap; Never Miss Payday Loan Payments”

  1. pligg.com says:

    Negative Equity Trap; Never Miss Payday Loan Payments | Loan Mortgage Credit!…

    For longer period of time, secured loans are the best choice. It is also suitable for those with a bad credit rating. As it a secured loan, it is a better option for those with a home as the lenders lend their money against the equity in a home. The ho…

Leave a Reply

© 2011 Loan Mortgage Credit!. All rights reserved.