What should you be cautious about when receiving a loan from a dealer as opposed to a bank?

When receiving a loan from a dealer, it's essential to be cautious because dealer loans can include misleading terms. This is often due to the way dealers structure their financing offers, which may seem appealing at first glance but can contain hidden fees, inflated interest rates, or unfavorable loan conditions that are not clearly communicated. Dealers sometimes focus on getting you to sign on quickly rather than ensuring you fully understand the terms of the loan, potentially leading to financial strain down the line.

In contrast, bank loans are typically governed by more stringent regulations and are required to provide clear disclosures regarding loan terms and conditions. While some bank loans may take longer to process, they often come with greater transparency and less likelihood of deceptive practices compared to dealer financing. Therefore, being aware of the potential for misleading terms in dealer loans is crucial for making informed financial decisions.