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This doesn't sound right? I thought the value of the collateral had no bearing on the loan, except as a condition for the lender to call the loan if the collate
by thechao 5y ago
This doesn't sound right? I thought the value of the collateral had no bearing on the loan, except as a condition for the lender to call the loan if the collateral loses too much value?
- Spooky23 5y agoIf a person owes $40k on an asset worth $30k, why would they keep paying? Based on what happened in places like California with mortgages, they will default one way or another.
- ahtihn 5y agoDefaulting has a cost though. If you default on your car loan, how likely is it that you're getting a loan for the next car? What kind of interest rate are you going to get?
- Spooky23 5y agoDepends. You can get a mortgage with a modest premium a year or two out of Chapter 13 bankruptcy.
- Scarblac 5y agoIn Europe at least, they'd still be on the hook for the rest.