October 19, 2007, Newsletter Issue #48: Military Lenders

Tip of the Week

Most military installations have one or two lending companies right outside their gates.  Some of these lenders are completely legitimate and issue loans to military personnel at reasonable rates.  Other lenders, however, attempt to prey on military members by posing as lenders who truly care about the nation's military folks, yet offer ridiculously high interest rates and tack on unnecessary insurance coverage to loans.  Most of these loan companies will have prominent military-type propaganda in the window and may exclusively write loans for military personnel.  This does not make them friends of the military, however.  If you are in need of an auto loan, it is best to steer clear of loan companies that make their money by preying on inexperienced military borrowers.  You will know this is the case if the interest rate they offer is twice as high as other lenders, and if things like disability insurance and life insurance are automatically tacked onto loan documents.  Disability insurance and life insurance are legitimate offerings for auto loans, but the customer should always have the final say as to whether this coverage should be added to the loan.  You will be far better off going with a reputable auto lender instead of one of these lenders.

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