How to Spot a Predatory Car Loan Before It’s Too Late
Predatory car loans can trap consumers in a cycle of debt. They often target individuals with poor credit or those in desperate need of a vehicle. These loans come with exorbitant interest rates, hidden fees, and unfavorable terms. Identifying these red flags early can save borrowers from significant financial distress. Here's an overview of how to spot a predatory car loan: High-pressure sales tactics : Lenders who rush you into signing without allowing time to review the terms are a major red flag. "Guaranteed approval" promises : While appealing, these often come with predatory terms, especially for those with bad credit. Exorbitant interest rates : Pay close attention to the Annual Percentage Rate (APR). Substantially higher rates than the market average, especially for your credit score, are a warning sign. Hidden fees and add-ons : Be wary of excessive administrative fees, extended warranties you don't need, or credit insurance bundled into the loan without ...
