My 11-year old car is starting to show signs of impending failure, so I’ve started looking around for a new one. Like a sensible person, I decide to check into what kind of used car loan I’ll qualify for (since the only cars I can afford to buy outright are no better than the car I’m getting rid of). After a bit of research, I figure that I’d want a 4 year loan for about $12,000, and I find that such loans carry an interest rate of 6-7%. So, I decide to apply for a pre-qualification at a web site that offers 5.89% interest on such a loan. The next day, I get an email saying “Congratulations! You’ve been approved! Call 1-888-BLAH-BLAH to finalize.” I was excited that I’d be able to shop for my dream car this weekend. However, when I call, I’m told “Yes, you’ve been approved for a 72 month loan, $18,000, at 12% interest.”
Excuse me? I’ll acknowledge that they can change the interest rate depending on my credit score, but doubling it? My credit isn’t perfect, but it’s not 12% bad. Also, did I ask for $18K? Did I ask for 6 years to pay it off? Who gets a 6-year loan on a used car anyway? Pretty much the only similarity between what I asked for and what they offered was that it was a car loan.
Have a look at Household. I financed a used car through them a few years back and didn’t have a lick of trouble. Looks like they offer rates as low as 5.29% on a 3-6 year loan, or 4.79% for a 3-year loan. Two fairly minor caveats - car must be 1998 or newer with under 80,000 miles.
Thanks for the reference - I already applied (and been approved) for a loan from another vendor that’s in line with what I was looking for. It just galled me that the decided to offer me a loan that didn’t have any of the requirements I’d applied for. Did they think I was so fearful of rejection that I couldn’t handle them saying no, and so offered me one with terms so ridiculous I’d have to reject them? Or did they think I was so stupid I’d taken any ol’ loan offer that came across? Either way, sending me an email and voicemail saying “Congrats! You’ve been approved!” was deceiving and annoying.
Ah yes, the “deceive and annoy” ploy, so common in today’s business practices. (I mean that sincerely, in spite of how snarky it sounds. The snarkiness is aimed at these businesses that pull stunts like this.)
Back in October, I decided to get a home equity loan to purchase a new furnace, do a few home improvements and pay off some CC balances. I applied through LendingTree.com and got a response from some bank or other whose name I forget. In the application, I specifically asked for a 10 year/$20k loan.
This lady from Mystery Bank calls me up and says that they reallyreallyreallyreally want to give me a loan, but their minimum is $25k…so do I really think I only have $20k of equity, or might I be able to squeeze out some more? Ummmm…no. So, she says that maybe instead of getting me a home equity loan, she can just refinance my mortgage altogether and cash out my equity. This really wasn’t what I wanted, but she was tapping away on her adding machine, so I just waited to hear what she had to say.
She came back and said “Well, I can refinance your mortgage at 5.8% and give you $12k at closing.”
I said “I already have 5.625% on my current mortgage. Why in the world would I ever refinance at a higher rate?”
She got quiet, and then said in a snippy voice “It’s not that much higher. You’re a Financial Analyst, you should know it doesn’t make that much difference.”