Beware Predatory Auto Repair Loans
Car repairs can be expensive and unavoidable. Yes, you want your car back on the road as soon as possible. But you may not have the money ready to pay for an expensive repair. Going without a car is often not an option.
Enter the auto repair loan. Many major car repair shops offer financing plans so you can pay for your repair over time and get your car back ASAP.
That’s all well and good unless you’re paying 100% or more in interest.
The National Consumer Law Center (NCLC) is out with a consumer warning on car repair loans.
Here are some of the complaints they’ve noted from consumers who use a financing company called EasyPay to finance their car repair loan:
- Promises of 90-day full interest rebates that are difficult to claim.
- Interest rates of up to 189%, with most of the payments just going toward interest.
- Harm to credit reports — sometimes even after the loans are paid in full.
- Harassment from debt collectors.
And here are some recommendations if you find yourself caught in the trap of an expensive EasyPay loan:
- Share your story, and sign our petition to tell the FDIC to stop these predatory loans.
- Opt out of forced arbitration clauses within 60 days to preserve your access to the courts and your negotiating power.
- Pay the full loan plus $40 within 90 days to avoid interest. Keep your proof of payment and proof of delivery if you sent it through the mail.
- Get legal advice. You may have legal claims to help you dispute the loan.
- Complain to the Consumer Financial Protection Bureau and your state Attorney General.
- You can stop debits from your bank account through your bank or revoke the lender’s authorization for the debits. But you will still owe the debt and may face debt collection.
- Check your credit report at annualcreditreport.com and file a dispute if you notice inaccuracies.
How does EasyPay get away with charging 189% for loans? They collaborate with predatory lender TAB bank to evade state rate caps.
Steered Into Debt: How EasyPay Finance Traps Consumers in High Interest Loans
Car repair loans with EasyPay carry rates up to 199%
The bottom line: Beware the predatory auto repair loan — ask questions and avoid EasyPay if you can.
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