Amazed I was approved, please help

[charmcity]

My car has been on its last legs for sometime. Today, the engine finally locked up on me and it's time to get a new one. I have been working on rebuilding my credit the last few years, although my scores are still very low (mid-500s). I applied to Roadloans thinking it was my only option, and as expected, I was denied. Out of desperation, I went to Capital One (I have a secured card through them) and amazingly I was approved for a loan for $17,000 at 19.8% (I know this is terrible). I couldn't believe it, I faxed in my documents and even called up to verify and they said my blank check was in the mail and I was good to go.

I'm still in shock, is this legit? Also, any sugestions on what to do with this Capital One check? Does anyone have any experience?

[Anonymous]

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@charmcity wrote:

My car has been on its last legs for sometime. Today, the engine finally locked up on me and it's time to get a new one. I have been working on rebuilding my credit the last few years, although my scores are still very low (mid-500s). I applied to Roadloans thinking it was my only option, and as expected, I was denied. Out of desperation, I went to Capital One (I have a secured card through them) and amazingly I was approved for a loan for $17,000 at 19.8% (I know this is terrible). I couldn't believe it, I faxed in my documents and even called up to verify and they said my blank check was in the mail and I was good to go.

I'm still in shock, is this legit? Also, any sugestions on what to do with this Capital One check? Does anyone have any experience?

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How come you have such low score with rebuilidng mode for few years?????

[pizzadude]

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@charmcity wrote:

My car has been on its last legs for sometime. Today, the engine finally locked up on me and it's time to get a new one. I have been working on rebuilding my credit the last few years, although my scores are still very low (mid-500s). I applied to Roadloans thinking it was my only option, and as expected, I was denied. Out of desperation, I went to Capital One (I have a secured card through them) and amazingly I was approved for a loan for $17,000 at 19.8% (I know this is terrible). I couldn't believe it, I faxed in my documents and even called up to verify and they said my blank check was in the mail and I was good to go.

I'm still in shock, is this legit? Also, any sugestions on what to do with this Capital One check? Does anyone have any experience?

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Cap1 is definitely a legitimate auto lender, but this is a situation where I would let the dealer try to get better terms for your loan.    20% is a terrible rate, and I wouldn't recommend going forward unless you are confidant that you can refinance to a lower rate soon....

[Creditaddict]

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@charmcity wrote:

My car has been on its last legs for sometime. Today, the engine finally locked up on me and it's time to get a new one. I have been working on rebuilding my credit the last few years, although my scores are still very low (mid-500s). I applied to Roadloans thinking it was my only option, and as expected, I was denied. Out of desperation, I went to Capital One (I have a secured card through them) and amazingly I was approved for a loan for $17,000 at 19.8% (I know this is terrible). I couldn't believe it, I faxed in my documents and even called up to verify and they said my blank check was in the mail and I was good to go.

I'm still in shock, is this legit? Also, any sugestions on what to do with this Capital One check? Does anyone have any experience?

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I used them in 2007 but I was approved for Roadloans who use to be Cap1 secondary financing, it later transferred to Santander and I also got another (worse) loan later from Santander too.

Now back to your Cap1... It has to be 2008 or newer I think? under 75k miles usually and can't be more than 10-20% blue book value and more than $500 in enhancements etc. I bought a Scion XB with my blank check... the whole thing is a modification LOL... but the dealer just puts it through as the price of the car without modificaitons, it was not an issue.

I knew my exact score for auto enhanced because I had been looking about a month... I told finance guy because like the other poster said, let them try to beat it... but I got 9.9 with Roadloans and he flat out said I can't get you better then 17%, I won't even pull credit.

but if you don't know exact "Auto Enhanced" Fico... let them try!

[drkaje]

I'd really shop around for something well under the $17K. If your credit is already 500ish range, keep the payment low as possible humanely possible to ease your budget's worried mind.

Looking for a car.... I'd shop around, a lot! I'd also avoid thinking some miracle is going to make refinancing at less than19.8% happen any time soon. If "I have been working on rebuilding my credit the last few years, although my scores are still very low (mid-500s)" is sincere, you'll have to eat the interest rate for a while. By the time you can re-finance, the car's value will depreciate so much that going even deeper into debt (on a newer car) may be the only method to get a lower rate. People do it all the time and trick themselves into thinking "Driving almost new every two" means they're making progress.

Improving my credit took a lot of time so I'm fighting hard to protect it. Currently, there's a lot of uncertainty looming ahead. I'm buying a beater and hope it held together for a year.

[Creditaddict]

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@drkaje wrote:

I'd really shop around for something well under the $17K. If your credit is already 500ish range, keep the payment low as possible humanely possible to ease your budget's worried mind.

Looking for a car.... I'd shop around, a lot! I'd also avoid thinking some miracle is going to make refinancing at less than19.8% happen any time soon. If "I have been working on rebuilding my credit the last few years, although my scores are still very low (mid-500s)" is sincere, you'll have to eat the interest rate for a while. By the time you can re-finance, the car's value will depreciate so much that going even deeper into debt (on a newer car) may be the only method to get a lower rate. People do it all the time and trick themselves into thinking "Driving almost new every two" means they're making progress.

Improving my credit took a lot of time so I'm fighting hard to protect it. Currently, there's a lot of uncertainty looming ahead. I'm buying a beater and hope it held together for a year.

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I can tell you that my 17% I took with Santander in 2/2010 on my Honda Accord from Carmax... The only good thing in that sentence is Honda Accord!! Out here in LA when it comes to budget cars (not the wealthy or even poor people with good credit, or your Hybrid breed of car buyers) the reliable, small, great gas mileage cars have actually gone up in value a little bit... (Shocked Face? yes me too until I saw my partners offer on his Yaris and then the offer on my Honda (at Carmax LAX) I purchased mine at Carmax before moving to CA.  Anyway they gave him $9k for his 09' Yaris maybe even 10' but it literally was stripped of anything, no auto windows, locks, etc. didn't know they made them like that anymore! but he got $9, think he paid like $13 new. My 04' Accord I bought for $12500 and put $1k down, so left with loan around $12k.

I was offered $9k for it at Carmax just over a month ago. After my car payment last month I owed $8700 and that is after making 4 payments on my refi 3% loan vs. my original 17%... Stick with me here. I had original loan of $12k, I had it for 27 or so pyaments and refied with a new loan for $10,300.

Do not look at this $17k loan saying I can easily pay the $378.18 payment ($17k at 17% for 72 months). You may be able to pay that payment easily but are you buying a car that can last the 72 months or probably at least 48 months before you "MAYBE" start to break even, agian taking into consideration that you buy a car that someone holds it's value over the years (Toyota, Nissan, Honda, Lexus, Infiniti, Acura)

Also don't get caught up with a sales person that if you want to have a $12k budget you can't get a decent car, I thought that too!! or a car with low mile, My honda had 73,000 miles when I bought it. has 88k now... I spent about $800 within first 2 months because Carmax' (acceptable) rating for when things need to be replaced is much lower then most dealerships are going to tell you. but although bad timing and irritating because I just bought the car, it worked out well from the stand point it was just regular maintanance and having it done when I owned it means it was actually done and it was done right. I have only rotated tires and changed oil since!!

sorry ran off a bit.

[drkaje]

@ CA,

I'm not really math inclined, LOL! What did it actually cost to drive the Accord?

Math isn't really instinctive, to me, but 3% is only seems better than 17% if the principle doesn't increase too much. Fortunately, DGF does all the math or I'd be in the poor-house.

[Creditaddict]

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@drkaje wrote:

@ CA,

I'm not really math inclined, LOL! What did it actually cost to drive the Accord?

Math isn't really instinctive, to me, but 3% is only seems better than 17% if the principle doesn't increase too much. Fortunately, DGF does all the math or I'd be in the poor-house.

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My Accord was bought for the $12k,000 ish after taxes and my $1k down for 60 months at 17% = $322/month

I refinanced $10,300 at 3.4% for 36 months and payment dropped to $295.00

[charmcity]

Thank you everyone for all your help.

In reading online, I see that the value of the deal needs to be under a certain LTV... is that something the dealer will help me figure out?

[Creditaddict]

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@charmcity wrote:

Thank you everyone for all your help.

In reading online, I see that the value of the deal needs to be under a certain LTV... is that something the dealer will help me figure out?

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yes but if you know what you are looking at before you go, you can get the kbb online yourself and now it will even tell you what you could expect to pay for it... I have used it 2 now and came within $200 of that price on a new Kia and came way below that price with my partners Infiniti but we took a 2011 when they only had 2 and were fully selling 2012!