I need some financial advice...

[AdamDuritz99]

ok, here's the situation. Buy August 15, I want to buy a car that cost approx 5000-6000 $. I'll have about $2000 saved up by then. I'm 19 years old so I don't really have any credit. By August I will have my latest job for about 5 months. Without getting anyone to cosign with me, do you think a bank will give me a loan? What could I do to increase my credit by then? Thanks for the tips...

peace
sean

 

[atrowe]

If you have a steady job and not a lot of other debts, you should be able to get a loan. You might be paying higher interest than someone with better credit, though, but you should have no problems getting a loan.

 

[Tates]

Most banks will want to see a credit history of at least 2 years and 2 to 3 credit references with no derogatory. They will also want to see at least 6 months to 2 years at the same job. They also prefer the vehicle to be 5 years old or newer. If you purchase the vehicle through a dealer, they have several sources of moneys. They may even finance it themselves, at a higher interest rate of course.

3 P's for Credit Improvement:

Patience, Persistence & Perseverance.

 

[Mister T]

how about a more long term solution:

Start building your credit?

Get a couple credit cards and charge 50-100 bucks a month and pay the bills time.
Do this for a few months..... viola! good credit.

 

[FelixDeCat]

You might get a bigger loan if you write "$5000-6000" instead of "5000-6000 $".

 

[AdamDuritz99]

Ok, I have a credit card with a $1000 debt. Would it be better to show up at the bank for a loan, with the debt paid off and $1000 down or just with the $2000?


peace
sean

 

[kerokeroppi82]

depends on your credit history. how long have you used the credit card for and have you always paid your bills on time?

 

[AdamDuritz99]

I've had the credit card for just about a year now. I've never missed a payment. I have a $1000 limit and it's maxed, but i never pay any less than 50 a month and sometimes $200-300 a month. But I want to have it paid off still. But for the short term future. Would it be best to have it paid off and a $1000 down, or just have the debt with $2000 down?

peace
sean

 

[AdamDuritz99]

TTT


peace
sean

 

[Viper GTS]

If you can only pay $200-300 a month tops on your CC, what makes you think you can make a car payment on which you'll likely be paying 25% or higher interest? I have friends who financed cars at your age, & they pay 29%. Not to mention the fact that comprehensive insurance will be mandatory, which will DOUBLE your car insurance costs.

How much money do you make? What are your expenses like?

Viper GTS

 

[AdamDuritz99]

Originally posted by: Viper GTS
If you can only pay $200-300 a month tops on your CC, what makes you think you can make a car payment on which you'll likely be paying 25% or higher interest? I have friends who financed cars at your age, & they pay 29%. Not to mention the fact that comprehensive insurance will be mandatory, which will DOUBLE your car insurance costs.

How much money do you make? What are your expenses like?

Viper GTS

yah, ok!

Any ways, Before I talk to the bank in detail, does anyone know if it's better to pay off a 1000 dollar debt(my only debt and credit history) before getting a loan?


peace
sean

 

[ShallowHal]

You don't need to pay off your credit card but having it maxed isn't necessarily a good thing. You should figure out what monthly payments you can afford before you do anything. A bank is a longshot for a loan. You'll have better luck financing through the dealership. They'll loan to anyone. (no offense). A bank is going to want to loan their money to someone who's had the same job for longer than 5 months. Also your debt ratio may be too high for the bank to accept your loan application. Good Luck. I hope it works out for you.

 

[AdamDuritz99]

hmm, ok thanks for the help about the credit card. I think i'm going to try comprimise with it. I really would perfer to go through a bank. I'm going to try to raise my credit in the next few months. I was going to go buy a watch a pay a few payments on it, then pay it off. Also there is this place in town that I can borrow 300 and pay payments on it for a few months then pay it off. So with my credit card history being good as far as payments and having it half payed off plus 2 other good marks on my credit. I think I might be able to pull off the bank loan. If not, does any one REALLY know what an average dealer ship interest rate would be? Thanks for the help.

peace
sean

 

[ChrisIsBored]

Paying off the debt on the CC would be a good thing though. One of the things a bank will look at when determining if you're loan worthy, will be how much in debt you are. Your one year of paying things on time will not look as well as having $0 debt to your card. It's going to take a few more years to get there.

Your time at your current job isn't much of help either. Usually a minimum of 6 months is required... and that's minimum. They'll also look at how much you're paying rent/mortgage.

Your best bet imo would be to pay off the credit card, or get it down to under $300 before attempting to get a loan. Even if your bank turns you down, there are others. You can have as many inquiries on your credit line within two weeks time and it only counts as one inquiry, so don't let people tell you not to shop around because it will affect your credit.

If it were me, I would try to save a bit more for a down payment, or try to borrow an extra grand or two from grandma(although my family wouldn't lend me $hit).

My $0.02...

 

[StageLeft]

At least half the debt you owe on that card. There are places like JD Byrider that are quite likely to give you a loan, but at high 20s interest rate. That's very very bad. I mean really bad. Don't do that. It sounds to me that perhaps you shouldn't be trying to get a car worth so much since you're already $1000 in debt, so really you're looking to borrow $4000-5000 after considering the $1000 or so that you actually have in the positive.

 

[StageLeft]

You can have as many inquiries on your credit line within two weeks time and it only counts as one inquiry, so don't let people tell you not to shop around because it will affect your credit.

That's a total fallacy. Each and every inquiry on your report is considered as an inquiry - whoever inquires there is a mark on your report and who made it such as "verizon wireless" or "bob sanchez chevrolet". I know this because recently I got my own credit report from trans union and it showed up all inquiries made last july - I made about 3-4 in a one week period.

 

[Viper GTS]

yah, ok!

Did you even stop to notice that I was offering you advice?

You asked for financial advice, & based on the information you've given us to work with my advice is to stay the hell away from car salesmen.

I'm 19 as well, & I've considered financing several times. I too have approximately one year's credit history (14 months), a $3,800 credit card limit, and over 2.5 years of employment history. Every time I've considered financing I've decided it simply isn't worth paying 29% interest + comprehensive insurance on a vehicle that's only worth $5K. Could I do it? Absolutely, I made $32K last year. I cannot, however, justify it. $200 a month interest is a hell of a lot of money down the proverbial sh!tter.

However, since you're so dead set on it, here's the answer to your question:

Will they give you a loan? Probably. You will take it up the ass on interest, but they love giving loans to people like you. Unlike cash loans they can always repo the car to get their money back, & they can charge you ridiculous amounts of interest for the privelege.

I could have gotten a $10K loan at 18 with no credit history at all, but who wants to pay $200+ a month in interest fees?

Viper GTS

 

[StageLeft]

I could have gotten a $10K loan at 18 with no credit history at all, but who wants to pay $200+ a month in interest fees?

Perhaps people who will do anything for the car they are dead-set on buying. I had to buy a car in the US with no credit history last year and because of that I could only get bent-over-a-barrel loan rates so instead I decided to use what little cash I could scrounge and I bought a car worth about 1/20 of my yearly income. It was a very wise choise. Don't let anybody bend you over that barrel and feed you high car interest rates!

 

[Viper GTS]

Originally posted by: Skoorb

I could have gotten a $10K loan at 18 with no credit history at all, but who wants to pay $200+ a month in interest fees?

Perhaps people who will do anything for the car they are dead-set on buying. I had to buy a car in the US with no credit history last year and because of that I could only get bent-over-a-barrel loan rates so instead I decided to use what little cash I could scrounge and I bought a car worth about 1/20 of my yearly income. It was a very wise choise. Don't let anybody bend you over that barrel and feed you high car interest rates!

Tell me about it.

I know two people my age where I work. One drives a 98 Camaro, one a 97 Eclipse. Both are dumping the vast majority of their incomes into their cars. One finally got smart & realized what an idiot he was being, but he's having trouble selling the car for enough to offset what he owes on it.

Viper GTS

 

[Aceman]

Start up a small savings account with a Credit Union. Mine has bailed me out many times over and given me loans at a great interest rates on about 5 loans in the past 9 years. (And I've had sh!tty credit throughout all those years.)

 

[AdamDuritz99]

Originally posted by: Skoorb
At least half the debt you owe on that card. There are places like JD Byrider that are quite likely to give you a loan, but at high 20s interest rate. That's very very bad. I mean really bad. Don't do that. It sounds to me that perhaps you shouldn't be trying to get a car worth so much since you're already $1000 in debt, so really you're looking to borrow $4000-5000 after considering the $1000 or so that you actually have in the positive.

I don't know if you guys are reading my first message in this thread, but i'm not trying to get a new car. I just want a $5000-6000 dollar loan. I'm really trying to shop in the low $5000 range. Isn't 15% down on a loan car fairly good?

Besides JD Byrider interest rates, what are the average car dealer financing rates?

peace
sean

 

[GiGoLo]

You can find out everything about what affects your credit HERE and also how loan granters look at your credit score and what triggers negative and positive credit ratings

 

[Viper GTS]

Originally posted by: AdamDuritz99

Originally posted by: Skoorb
At least half the debt you owe on that card. There are places like JD Byrider that are quite likely to give you a loan, but at high 20s interest rate. That's very very bad. I mean really bad. Don't do that. It sounds to me that perhaps you shouldn't be trying to get a car worth so much since you're already $1000 in debt, so really you're looking to borrow $4000-5000 after considering the $1000 or so that you actually have in the positive.

I don't know if you guys are reading my first message in this thread, but i'm not trying to get a new car. I just want a $5000-6000 dollar loan. I'm really trying to shop in the low $5000 range. Isn't 15% down on a loan car fairly good?

Besides JD Byrider interest rates, what are the average car dealer financing rates?

peace
sean

Keep in mind that financing on used vehicles is higher than new. Expect to pay high 20's interest rates.

Viper GTS

 

[AdamDuritz99]

link 1
link 2
link 3

I know not to believe everything online, but these are a few links i found. I talk to my bank a few days ago. Told them I don't have any real credit, and asked if it was possible to get a loan, how much would interest be. They told me 9.2-11%. Any body to spend more than 12% on interest, must be out of there mind. I guess you guys think every person here at AT that isn't popular is an idiot. You got one wrong. What I need help with is actually getting a loan. What can I do to help my credit and chances to get one?

Thanks for the peeps that are really giving me advice.

peace
sean

Oh yah, Is 15% down on a loan car fairly good?

 

[gogeeta13]

honestly man, buy a 2-3k reliable car like a corolla or a prizm and wait till you have better credit and more income. it just isnt worth wasting away your money on stupid useless crap that you cant afford.