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Beware of Auto Loan Scams

The process of looking for an auto loan is a somewhat long one. Once you have identified the car that you want and the price it is going for, you have to fill in an application form. This form, once completed, is taken by the salesperson to the finance manager for approval. If the dealer is credible, the approval does not take long. However, if they are not, you might be prey to unscrupulous dealers looking to make a killing from you.

Usually, the unscrupulous salesperson will lie to you that your loan application has been denied because of your poor credit score. They then ask you for more time to enable them convince the financial institution to give you an auto loan. They will come back with the good news, but then you realize that the interest rate on this loan is higher than you had hoped for. Dealers that can be trusted typically have links with both local and national lenders, and some well established ones even have internal financing capabilities.

This is usually the easiest way these deals make profits form you. They will lie to you so you end up paying higher finance costs over the term of the loan. The good news is you can beat these thieves at their own game. Anytime you are at a dealership looking for a loan, ask to see your credit rating from one of the three major credit bureaus. If they refuse to show it to you, do not waste any more of your time and leave.

The three major credit companies use people’s credit scores in their reports to financial institutions. These credit scores are so important to some lenders because they use them to decide who to give loans to. There are some lenders who only give auto loans to people with credit scores that are above a certain level, so if your credit rating is below that point you are automatically disqualified.

You should arm yourself with a copy of your credit score before going out to look for a lender. Your bank or credit union can also help you get a credit quote. Trustworthy dealers can get you an auto loan with good interest rates than you can do yourself because they usually have good lending relationships. These relationships include knowing the amounts given and terms of interest on them and also the year and make of car that you want to buy.

Always remember it is not possible to be conned if you keep your eyes open and arm yourself with relevant information. You can get that auto loan without much hassle if you keep this in mind.

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