How To Get Fair Access to a Loan

Are You Getting Fair Access To Capital?

We all know there is discrimination in lending. And housing. And the workplace. Has been so for many years.

Consider the ZIP Code

All across the country, we find beautiful homes on densely tree-lined streets in neighborhoods that we now consider charming, even genteel. Go back a few decades and you’ll find these zip codes where no bank would contract a mortgage.  Too crime ridden, too risky, or just too ____ (fill in the blank).  Discrimination in lending is a common problem in the auto finance industry.  And a long-running one at that.  There are a whole host of reasons, including profiling buyers, increased opportunity provided by an indirect-lending system, and sometimes it’s just plain greed.

Why Me?

Black, Hispanic, and Asian borrowers have higher interest rates on indirect auto loans than their non-Hispanic White counterparts and that these differences are almost completely attributable to differences in markups.  Why the markups, and why to some buyers and not others? We all know there is discrimination in lending. And housing. And the workplace. This has the case for many years.  Legislation hasn’t made a dent in it, nor has it worked to modify behaviors.  Indirect lending places a party in the middle whose main objective is to capitalize wherever possible. Shocking?  It’s true. But keep in mind, discrimination in lending covers a vast swath of opportunity, and often isn’t obvious.

What You Don’t Know Will Cost You

What you don’t know will cost you. What you don’t have will cost you. What do we mean?   Take a look at a standard credit application, and some of the information you will provide to apply for a loan…

• Do you rent your home, or do you own
• Do you have only a few months on the job?
• Are you a student?
• First-time buyer?
• Single?
• Under 25?
• Do you not have enough credit history?
• Do you have doubts about your ability to get financing?

Every text box entry on the credit application is a potential vulnerability that can and will be monetized.  Add to this other factors such as skin color, gender, ethnicity, and you can see the potential for leveraging every aspect of your life into more and more money.  Sometimes it’s a combination of the factors listed above. Sometimes it’s the simple fact that you’re merely treated as an open wallet waiting to be raided.

Expectations of Fairness

When you use Expedia, you have the reasonable expectation that your apples-to-apples itinerary with the site user before and after you will cost you roughly the same price. You have this same expectation, all factors being similar, when it comes to using Uber.  Or AirBnB.  You wouldn’t expect that everyone in line at the grocery store pays a variable price for a bag of Doritos. And yet, with auto finance, many customers rightly suspect they are paying more than others.  The lack of transparency fosters this, as do the many lawsuits and transactions that support such a belief. When purchasing a car, securing a loan and adding products for the car, you have for decades had the reasonable expectation that you were not paying the same for each step in the process.

Fast.  Fair.  Equitable.

Fast, Fair and Equitable access to auto finance capital is crucial for setting the system straight.  It’s just.  It’s humane. And it’s about time. Just as you have come to expect from Expedia, or Uber, the fast, fair and equitable model is direct. And you can take that straight to the bank. With BankHunter.