Bad Credit Car Loan

Posted by admin on November 23rd, 2009 at 03:42pm

Question:
Do you know what maximum fee a bank can charge on a bad credit car loan?
My friend just bought a 2002 cavalier. His credit is poor after his divorce a few years ago. We just discovered that the bank charged us $4700 extra on a 12,000 loan (we put $2500 down) for his poor credit. We weren’t informed of this by the dealership when we purchased the car. Have you heard of a bank charging an ridiculous fee like that and are they even permitted to do so?

Answers:
Yes, it’s becoming more typical. It’s known as predatory lending and states are just now beginning to investigate it in bad credit car loans and and pass laws. My prediction is for the time being, they can charge however much you’re willing to pay. Contact your state’s attorney general’s office for more information on what lending institutions can and can’t do.

Banks are regulated by the state government or federal government, and when they attach a charge, you can bet that ninety-nine percent of the times it is in their legal rights to do so.

If a person has bad credit, the advantage is with the people lending the money. They have control on the borrower. If you agree to a contract, you are at fault. You should get your credit renewed and get an ordinary loan, clear the debt, set down a spending style and budget you can live on and not waste money. Ride the bus during the meantime, carpool etc. Eliminate unnecessary expenses. A vehicle is a luxury not a need. Only purchase absolute neccessities while you’re paying off the debt. Then begin to establish on a balanced budget and savings plan.

Under Cars and Bad Credit