My daughter, only age 20 new into the world and trying to be a young adult applied for a loan in Irving Texas. She already had a car financed through another bank (about $17000.00). This amount was showing up as the balance on her credit pulled by the dealership and Drive Financial who approved the new loan just applied for.
Although, it is good that there are institutions out there that will help the slow pay and bad credit consumer who need a second chance, it is entirely absurd to finance yet another car to a consumer for another $20,000.00 loan with a car showing unpaid at the time on their credit, expecially since thats job was an $8.00 job.
I feel that there should be practices in place to stop such loans like this from hapening since it is evident that the loan cannot be paid back. Not only does this set on up for immediate financial failure and disaster, a re-po is evident and the report goes on ones credit. Now you do not have a slow pay credit, their credit is ruined. This sort of practice should be out-lawed. It would be in the best interest of this sort of patron.
This action forced me to have to make further financial arrangements on the car already financed and showing up in both of our names (my daughter and I). The first loan was commited to first. My daughter had signed the loan documents to the first bank. I was trying to help her get credit established. Now, it is ruined before she ever got started. Practices should be in place to protect such a consumer and the bank. I feel that my daughter was naive and new to the world of adulthood and finance, but if she had been told no due to laon already outstanding, we would all be better off in my opinion.
She did call them to ask them to voluntarily come pick the car up. They have yet to do so, imposing yet more fees on a person that cannot make any payments on this car to start with. All of these details were not told to her. I guess she now will learn the hard way, but I cannot believe she was approved to start with.
Further, they are apparently a financial institution that finances to such people at huge interest rates and fees more than the car financed is worth! What poor business, deceptive practices in my opinion. It is a unbelievable. I realize she signed the papers, but she is so young, she was not mature enough to realize all of consequences of such a loan, nor was that explained to her. It was totally obvious that she could not make payments on 2 financed cars at $8.00 and hour. Not only was her credit hurt, this imposed problems for me (the co-signer on the irst loan).
The bottom line is that she should not have approved at all due to the debt-ratio to income for the outstanding loans that already existed on her credit report. This is amazing. I cannot believe such actions are legal. Would this fall under the Usury Law or any other kind of law??? This action forced me to take over the payments of the first loan and move it out of my daughter's name. I am angry with her for doing this, the math did not add up in the first place, but they should have not financed her. Now, she will be feeling the consquences that hurt so many. She was not inancially able to make any payments on a Mercedes with an $8.00 job and a 2006 Toyota Camry already financed.
Just another statistic to our economy: approving a loan that should not have been. Slow pay, bad credit or little credit I can see, but not intentionally approving and over-extending someone that it was obvious could not pay based upon their own credit report of debts outstanding.
I was just shocked that anyone could be approved this way. It is not meant to be derragatory or otherwise. It is an observation. I am surprised that this is allowed and legal? How many more re-pos are there due to this? I wonder? The bank approved this loan, but I sure cannot understand how. I would not have belived it myself if it had not happened so close to home and the consumer is still held accountable? What about over extending a person?
Brenda
McKinney, Texas
U.S.A.
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