Lee Van asked:




You may be familiar with a plan-vanilla mortgage, so what’s a second mortgage? It’s simply another mortgage on your home – a loan secured against the property. The term “second” indicates that the loan does not have priority on your home in case you default. Instead, your first mortgage has priority and would be paid before any funds go towards the second mortgage.

Whether you need some extra cash to pay off some credit card debts, or to make some home improvements, home equity lines of credit or second mortgages can be great ways to get started.
A lot of people cannot come out on their wages and find that the money is gone before the month or fortnight has. They live from one pay day to another. The last few days before being paid are the worst. There is no more money to survive and they look around where they can borrow a little cash just to tide them over until the day they get paid.

A number of money lending agencies have jumped on to the band wagon and started lending very small loans over a very short period of time. The duration of the loans are from one day of payment to the next, this is how these loans got their name, payday loans.
This sounds as though it would be the ideal solution for the people who cannot get through the month with their wages. The problem is the lending agencies are too greedy. Instead of being satisfied with nominal loaning fees they are charging unrealistic fees. In fact the fees they charge have been known to go up to over eight hundred percent of the loan. It is ridiculous that this is allowed to happen. There should be laws against such practices.

The borrowers are not aware of what they are letting themselves in for. They borrow a small loan with full intention of paying it back on the next day they receive their wages, but now that the interest or loan fee is added the amount might just be too much to come out of the budget all at once. If the loan cannot be paid the correct day, it has to roll over for the following time the borrower receives his wages. Each time the loan rolls over the same amount of interest is added for the extension period. This amount just increases every time the loan rolls over.

Courtney