A bad credit auto loan is one of the many types of loans that typically don’t require people to go into a bank. Instead simply have to fill out a few forms on the Internet. Unfortunately, this means that loan scammers can easily take advantage of people who are trying to find a car loan. These auto credit loan scams are very easy to implement. It’s crucial that you always check the Better Business Bureau and other agencies before you give up your personal information. Here are some common bad credit auto loan scams that you need to look out for.
Auto Credit Loan Scams Using a Co-Signer
People who have no credit at all or bad credit may require a cosigner in order to obtain a legitimate car loan at their bank. However, some scamming auto loan lenders will tempt you to find a cosigner. You may think that finding a cosigner will aid you in getting the loan. However, the lender will put the entire loan under your cosigners name, which won’t do anything to help your credit and may even cause insurance issues. It will also put the entire burden on the cosigner. If you do need a cosigner, then it is important that you make sure that the documents have both your names on everything to avoid auto credit loan scams.
Altering Terms Scam
One of the most popular auto credit loan scams for bad credit lenders is when you finance through a dealer, however it can apply to online car loans as well. They will then inform you that you are able to obtain another loan, but at a higher interest rate. This is a trick to get you to pay more money. As they know you won’t want to return the car. If this happens to you the best thing to do is to return the car, refuse the auto loan and find a better loan.
Lying About Your Credit Score Scam
Some auto credit loan scams lenders rely on the fact that auto shoppers don’t actually know their own credit score. If you are looking for a car loan without actually knowing your credit score then you’re just asking to get scammed. All it requires is for a lender to lie about what your credit score is. Once they do a credit check they can simply tell you that you don’t qualify for competitive financing rate without telling you what your credit score is. This is in order to make you desperate, and willing to take a bad credit auto loan even when you don’t necessarily need to.