Does one size fit all?
by. Erik Payne
What credit unions can learn from a Canadian bank’s 25% auto loan interest rate.
According to a CBCNews article published Monday, TD Bank misled a British Columbia couple into a vehicle loan with an interest rate of 25%, which left them paying more in interest than the book value of the car.
“We’re paying $21,000 for the loan — then $23,000 in interest,” says Angie Hauser who, along with her husband Enzo Gamarra, is speaking out against the institution.
The Canadian couple declared bankruptcy in 2010. In 2011, the couple needed a new vehicle and were able to find a dealer willing to finance vehicles for people with bad credit. According the couple, the dealership sold them a 2010 Dodge Avenger on a seven-year term at 25% interest with the promise that if they made their payments in full and on time for one year, the dealer would refinance at a lower rate.
When the couple returned to the dealership a year later, the dealer refused to refinance because of their history of bankruptcy.
“How can you deny me refinancing when I’ve been in bankruptcy when you gave me a loan in bankruptcy?” Hauser asks. “It doesn’t make sense.”
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