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Auto Loan Approval-New to this!!!!

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Established Member

Auto Loan Approval-New to this!!!!

I currently am in need of a new vehicle. I don't have any negatives on my credit. My Eq (FICO) is 641. I have one student loan that I have been making payments on. My credit history is about 1 year 5 months long with no other credit. Would this cause me to have a higher interest rate or even a decline. Looking for a new or certified used car between $16,000 - $18,000 with about $2,000- $3,000 down.

 

Income: 16,000

Current : Eq FICO 641

                 Credit Karma 656

                 Credit Sesame 680

Message 1 of 10
9 REPLIES
Valued Contributor

Re: Auto Loan Approval-New to this!!!!

If that is 16000 a year, I dont think you have the income needed to get an auto loan at all. I think 24,000 a year is the minimum for most auto loans. You will need a cosigner.

Message 2 of 10
Established Member

Re: Auto Loan Approval-New to this!!!!

When i got my first auto loan, by myself, I think i was barely making 12k/year.  I was a college student working part time... my interest rate was 15.99%-- BUT, my loan was only for 6k-7k.  This was in 2007, so I'm not sure what's changed since then.  I think you can get approved for a higher interest rate, but I wouldn't expect to get approved for as much as a new car will cost.

In 2008 we purchased an older SUV (It was 6-7 years old i think), I cosigned with my husband, our credit scores were not great, he was probably high 500s, I was low to mid 600s, and we got a 13.99% 

Since then I've gotten great rates, We refinanced the above SUV in 2009 at 4%,  0% on a new vehicle in 2010 (I was working part time for this one too actually, maybe making 13-14k?) , 1.9% on a certified used in 2011 (cosigned with my Husband), 2.49% on an older used truck in 2012 and 1.9% on a new this week.

 

Just a little insight to my history.  I think you can get approved, but I wouldn't expect a 20k car.

 

 

 

Message 3 of 10
Established Member

Re: Auto Loan Approval-New to this!!!!

Try getting preapproved at a credit union before shopping for a vehicle.  I've had a lot of great experiences at CU's, and they usually have great rates.  You can tell them you're looking for 16k loan maximum, and they can tell you your max.

Message 4 of 10
Established Member

Re: Auto Loan Approval-New to this!!!!

Thank you. I am actually a member of a CU so I will definitely go by and see them.

Message 5 of 10
Established Member

Re: Auto Loan Approval-New to this!!!!

Good luck! Keep us posted!
Message 6 of 10
Regular Contributor

Re: Auto Loan Approval-New to this!!!!


tweetylove0405 wrote:

I currently am in need of a new vehicle. I don't have any negatives on my credit. My Eq (FICO) is 641. I have one student loan that I have been making payments on. My credit history is about 1 year 5 months long with no other credit. Would this cause me to have a higher interest rate or even a decline. Looking for a new or certified used car between $16,000 - $18,000 with about $2,000- $3,000 down.

 

Income: 16,000

Current : Eq FICO 641

                 Credit Karma 656

                 Credit Sesame 680


Ok, if you are still living at home and have no other expenses you might be able to pull off a smaller loan than you wanted, but you will definitely be paying high interest rates like 10%+. IMHO, I would advise getting a co-signer if at all possible, if not then look for a smaller loan or use the 2-3k you have and buy a junker to get you around to and from work.

Age: 22 //Cards: Chase Freedom, Chase Amazon Visa, Discover IT, CreditOne, CapOne Quicksilver, CapOne Cash, Walmart, Barclaycard, Citibank BestBuy, NavyFederal Visa Signature cashRewards //AAoA: 1 Year 3 Months (but going down quickly Smiley Tongue) //CK:692, Sesame:656
Message 7 of 10
Valued Contributor

Re: Auto Loan Approval-New to this!!!!

If your income is only 16k...I probably wouldn't be looking at a loan between 16-18k. Your payments would probably be around $350. Go online and search some cars under 13k. After taxes and licenses...your loan will inch back up a few thousand.

As of 2017, rebuilding...
Message 8 of 10
Valued Contributor

Re: Auto Loan Approval-New to this!!!!

+1, getting a car equal to the income you make won't look good to banks. You need to go lower.
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Message 9 of 10
Frequent Contributor

Re: Auto Loan Approval-New to this!!!!

Look for a cheaper car with your income. Do not look for someone to cosign a loan with you.
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Message 10 of 10