Cash Loan Crisis - Equity Loans

Equity Loans - A Long Way From Home

Apparently not everyone is up to date on their financial jargon - and by everyone we mean the majority of Americans between the ages of zero and 35. Personal finance? Thats the land of the geriatric, where dentures and toupees reign supreme - the average youngster doesn't know the difference between equity loans and payday advances, and indeed the lines can become a bit blurred where your financial emergency comes into play.

Almost equity loans - but not quite

By definition, equity loans are any form of financial assistance you receive in exchange for putting something up for collateral. Equity financing against your home is the most common form, but you can also borrow against a car, family heirlooms, land, whatever worth you have.

So what about your upcoming paycheck - thats a form of equity, isn't it? You get paid every two weeks without fail, so that money is as good as the rest, right? Well...no, not really. While your paycheck is stable and while your lender might feel more comfortable lending to someone whose been employed for greater duration at the same job, its still not quite money in the bank.

Yeah - so what?

Its a slight difference, but its a difference enough to completely transform your financial assistance. With equity loans your lender has a guarantee of repayment - fault out on your repayment and they can take your house, car, whatever. But they can't take an upcoming paycheck, no matter how badly you might want to them to do so. Its voluntary - meaning they run the risk of you not repaying at all, meaning higher rates and greater responsibility thrust squarely on your young, powerful shoulders.

What a difference security makes in your financial aid - right? Right! So forget about the Cash Loans Crisis - with education there is no such thing as crisis mode.