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Telltale Signs of a Bad Car Loan, and is it ever too late?
April 29, 2015
Many consumers know how to get a good price on loan. Fewer, however, know how to ensure their loan is fair.
The amount of auto loan debt hit record highs in 2014, partly because these days auto dealerships are making the majority of their profits on financing--not the sale itself.
Here are some signs of a bad auto loan:
* Auto loan markups. In some instances, dealers receive a kickback for steering shoppers into high-interest loan from pricey third-party lenders. To avoid this, get pre-qualified at your credit union before shopping.
* Yo-yo financing. This occurs when you take the car home and the dealer calls to tell you something was wrong with the "conditional" sale. The object is to try to get you to sign a more expensive loan. If this happens, return the car and go somewhere else. You should also report the incident to the state attorney general.
* Charges you don't understand. This is called "loan packing" and occurs when dealers add aftermarket "add on" products you don't need.
* Your loan is from a captive lender. Also known as a nonbank auto finance company, these companies most often give loans to consumers with no or poor credit histories with interest rates much higher than from the credit union.
If you fear your auto loan is bad, see Central Sunbelt about refinancing. And if you're going to buy a car, first get preapproved for an auto loan, which will ensure you never have to experience a bad car loan.
What if it is too late?
It's never too late to get the right loan! A new loan from Central Sunbelt called a S.M.A.R.T. Auto Loan (Save Money and Refinance Today) will take your current auto loan and guarantee a better rate of at least 1% APR or better, down to as low as 1.9%! To top it off, Central Sunbelt will give you cash, up to $500 1% your loan's value).
Copyright 2015 Central Sunbelt Federal Credit Union and CUNA Mutual. APR = annual percentage rate. Qualifying required for financing and membership. Offer is only valid for refinancing loans with an origin from outside Central Sunbelt.