<prompt> Human: Pardon me if this is a dumb question, but I asked my wife and she was stumped, and Im not sure what terms to google...Whats the point of a downpayment for a loan? I mean, if I want a 100 loan, but they want me to put 20 down... then why not just call it an 80 loan with 0 down? Or, if I couldnt afford the downpayment, but the lender still wants 20 - why not get a loan for a larger amount, and then use part of the loan as the downpayment, using your credit card or some other quick tool for a 1 day loan? edit: okay, Ive gotten good answers, no need for anyone else to waste their time explaining. Thanks, I understand a lot better now!  <response>: If you default on a 100 loan you put down 20 then the loan company is out 80 and you are out 20. If you default on an 80 loan then the company is out 80 and you are out 0. Its mostly a way to make certain you are inclined to pay the whole loan. 