Need a Car Repair Loan? Stay Away from EasyPay

Repayment is anything but easy when rates go up to 189%

Andy Spears


Photo by Kate Ibragimova on Unsplash

A story in Repairer Driven News notes that many auto repair shops offer financing for repairs through EasyPay Finance, a fintech lender that partners with TAB Bank to offer loans with interest rates up to 189%.

The story includes notes from Consumer Federation of America and National Consumer Law Center on the scope and impact of these predatory loans:

“Auto repair shops throughout the country, including major auto repair companies, are steering struggling consumers into deceptive, high cost loans with lasting impacts, including credit report harm and debt collection harassment,” said Rachel Gittleman, financial services outreach manager at CFA.

Lauren Saunders of NCLC suggests that these shops should steer clear of partnering with any lender who charges interest rates in excess of 36%.

“Auto body shops should not partner with lenders charging more than 36% (ideally lower for larger loans) — 36% is widely viewed as the dividing line between mainstream credit and high-cost credit that is much more likely to be predatory.”

I wrote recently about TAB Bank and their propensity to present two faces to the public:

Here’s how TAB describes its desire to partner with fintechs:

Capitalizing on buy now, pay later demand, TAB Bank partners with multiple fintechs that specialize in technology to make everyday purchases easier and faster. These partnerships have fueled tremendous growth of these companies. Loans through these partnerships are made by TAB Bank, which determines qualifications and terms of credit. Many fintechs achieve approval rates of 90% or more with the application process on many loans taking less than one minute for amounts from $50 to tens of thousands of dollars.

I guess that’s one way to describe a profit model based on usurious interest rates that punish borrowers least able to pay. In TAB’s model, everyone wins but the borrower. The auto or retail shop gets paid, EasyPay makes a huge profit off of an outrageous interest rate, and TAB piggybacks on that rate to rake in ridiculous cash.

It’s clear the word is getting out about TAB Bank and their predatory pals at EasyPay. Only time will tell if auto repair shops take action to stop their customers from being gouged by outrageous repayment rates.

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Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .