- Consumers might find themselves "upside-down" when their outstanding loan balance is higher than the current fair market value of the item purchased with the loan. For example, this situation is most common with vehicle sales or leases because in the early years of a lease or loan, the vehicle depreciates quickly, but the outstanding balance stays high.
in debt, haywire, backwards, reversed, distressed
Related Terms and Acronyms
- Consumer Credit Service (CCS) — Acronym,
- A service that offers counselling about how to work out a realistic budget and debt repayment plan and work with creditors. The goal is to ensure that debts are paid back over time.
- Current Market Value (CMV) — Acronym,
- The estimated price determined by the recent sale of similar properties.
- Depreciation — Definition,
- The gradual loss of value of a building or other property because of age or natural wear.
- Distressed Property — Definition,
- Property that is in poor condition, or whose owner is in poor financial condition.
- Fair Market Value (FMV) — Acronym, Very Important,
- The highest price that a buyer would pay for a property and the lowest price a seller is willing to accept.
- Gap Insurance — Definition,
- A type of insurance offered to auto lease customers. This type of insurance covers the difference in value between a vehicle's book value and the amount remaining on a vehicles financing or lease, if such a difference exists.
- Maximum Financing — Definition,
- A loan given for a property where the buyer puts down the lowest allowable down payment possible.