Consumer Protection Topics - Loans
There are many types of loans, such as student loans, vehicle loans, and business loans. Consumer protections may vary by loan type. We provide more information below on common loans and tips to consider when borrowing money for certain purposes. For more information on student loans, visit our Student Loans Page.
For most consumers, an auto loan is their biggest monthly expense after their mortgage or rent payment. That's why, when you're thinking about buying a car, it's important to thoroughly research loan options. Here are some strategies to consider:
- Determine how much extra money you have every month to use for a car payment. A good budget also includes costs like insurance, taxes, gas, and routine maintenance.
- Shop around to different banks, credit unions, car dealers, or other lenders offering low interest rates or cash rebates.
- Call several car dealers to see if you can negotiate a lower price for the car.
- Before you sign a contract to finance a car, read the contract to make sure you understand the financing terms. Be sure to keep a copy of the contract signed by both you and the lender.
Business loans are not subject to most federal consumer protection laws and regulations. However, in 2010 the FDIC, along with other federal and state financial regulatory agencies, issued a statement on prudent lending to small businesses titled, “Meeting the Credit Needs of Creditworthy Small Business Borrowers.” The FDIC also reviews industry practices regarding the accessibility of credit and to ensure the availability of financing to creditworthy small business borrowers. If you have a question or issue concerning a business loan involving an FDIC-supervised institution, please contact the FDIC by submitting the Business Assistance Form.
Consumer Protections Available
Certain types of loans are covered by consumer protection laws and regulations but others are not. For example, commercial and agricultural loan transactions are not subject to most federal consumer protection laws and regulations. Generally, consumer protection laws cover loans established primarily for personal, family, or household purposes. Some common consumer protections include:
- Lenders must show you the cost of credit as a dollar amount and an annual percentage rate (APR) and disclose terms in a meaningful and uniform manner.
- Debt collectors may not use abusive, unfair, or deceptive practices to collect money from you.
- Your lender, servicer, or debt collector must provide accurate information to credit reporting agencies. Credit reporting agencies must also report accurate information you. Once a year, you may request a free copy of your credit report from each agency by telephone, mail, or at annualcreditreport.com.
- Your lender may not discriminate in any aspect of a credit transaction based on race, religion, national origin, sex, marital status, age, if you receive public assistance, or if you exercise your rights under the Consumer Credit Protection Act. (This protection also applies to business loans.)