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Chances of getting approved for a $40,000 loan

New Member

Chances of getting approved for a $40,000 loan

Long story short; I am trying to get a 2014 Range Rover Sport... I have limited credit of my own, but my grandparents added me as an authorized user to their credit card boost my scores up a lot... perfect payment history and low card usuage reflects on my credit from their card. I have 2 secured credit cards that are just 4 months old... but they will be the brink of my credit building. 

 

 

Income:

I have a job where I gross about $2000 a month - Then I have a business where I make $1200- $2000 weekly, it's been consistent for the last 6 months, there has been some very very slow weeks, but I'll always profit. I have proof of this.

 

I have a 2004 Pontiac G6 to trade in, and I have about $7500 for down payment... what's my chances. ??? before waste my time?

Message 1 of 13
12 REPLIES
Regular Contributor

Re: Chances of getting approved for a $40,000 loan

I think you will be hard pressed to get approved for such a large loan with the very limited credit history you have, aside from the authorized user card's which lender's usually ignore, you only have 4 months of history on two secured credit cards. From a underwriter's perspective they are likely to decline the loan for no comparable credit, you have never borrowed that much money and you have no history with such a large payment.

 

Bank's do love equity deal's with low LTV but they will only go so far, there is  alot of risk involved still.

 

I would suggest looking at a cheaper vehicle and establishing your credit history with a smaller installment loan, with only 6 months worth of history with your self-employed income, I wouldn't want to take on such a large payment until I was for sure the income will keep coming in and be stable.

 

Another issue you will run into is that if they were to approve you, chances are they would stipulate for proof of income. Your self-employed income only has 6 month's of history and most prime bank's will require 1-2 years worth of tax returns showing a schedule C/c-ez line 31 to calculate and use self employment income. Some subprime bank's and few prime banks will use 3+ months worth of personal bank statements showing the self-employed income being deposited but not all lender's will do that.

AMEX BCE ($39,500) CITI AAdvantage ($18,500) Region's Platinum Card ($14,400) Discover IT ($13,000) Macy's ($7,500) Chase FU ($10,000) TU:768 EX: 767
Message 2 of 13
New Contributor

Re: Chances of getting approved for a $40,000 loan

You will not be "prime" but someone will probably write the loan unless you have items in your credit you did not mention. 

 

1. You will need bank statements to prove your income - Your odds would improve if you wait one more month and show a 2017 tax return and docs with that side income. If you did not pay tax on the income then it will not count. At 2k a month you will get denied.  

2. A lender who will let you recon with an underwriter who can actually look at the big picture. 

 

Also get a CPO Range Rover Sport  they extend the key parts to 7years/100,000 on a CPO . You do not want an out of warrantee Range Rover. 

775/780/789- EOY 2017
Message 3 of 13
New Member

Re: Chances of getting approved for a $40,000 loan

Ok. But Lenders do not ignore authorized user tradelines; My dad got a boat loan and all he had on his credit was my mom's credit cards which he was authorized user for and he's also a few of my grandparents credit cards.


With that being said, Lenders definitely DO consider authorized user tradelines. When someone adds you as an authorized user the underwriter view this situation to be "You have your own card and use the account just as responsibily as the primary card holder"... that's just how it works. Therefore in this case, I might have limited credit but I won't say they ignore authorized user tradelines. 

Message 4 of 13
Regular Contributor

Re: Chances of getting approved for a $40,000 loan

I am not saying that underwriter's completely ignore AU tradeline's, however they weight them VERY lightly. There is no proof that you are responsible for those AU accounts, the underwriter doesn't know if you are being responsible and making charges on the card and paying it. The account holder could be paying for the AU charges, the AU may not actually have posession of the card. There's many reason's why AU accounts aren't worth much weight, your Individual credit is only 4 month's old with secured, more than likely, low-limit, cards.

 

You asked a question and I simply posted my thoughts and my two cents. It is VERY difficult to get a 40k+ auto loan with no installment history and short revolving credit history. In addition, without your self-employed income you do not budget for such a payment, so if you can't prove that, then it will make it really difficult. I am not trying to knock you, but from my experience it will be a tough deal to get done, and I think from a financial stand-point you should purchase a cheaper vehicle to get started before hopping into such a large payment with only 6 month's worth of history making the money you have been at your second job.

AMEX BCE ($39,500) CITI AAdvantage ($18,500) Region's Platinum Card ($14,400) Discover IT ($13,000) Macy's ($7,500) Chase FU ($10,000) TU:768 EX: 767
Message 5 of 13
Frequent Contributor

Re: Chances of getting approved for a $40,000 loan

AU accounts of spouses are weighted completely differently, as spouses as generally responsible for each others debt by law. Your dad and mom sharing cards is not viewed the same as you being an AU on a parents card.
My Cards: NFCU NavChek 15k; NFCU Cash Rewards 4.6k; Ashley Furniture 7k; Lowes 3.3k; Home Furnishings 2.5k; Amazon 1.5k, Guitar Center 1.5k; Discover It 2k; Local CU 1k; PenFed PLOC 2.5k; PenFed OLOC 500; CapOne Quicksilver Platinum 800; CreditOne Platinum 300; Sears Citi 4k; Total 46.5k credit. 2 NFCU Auto loans @ 3.09%; and a mortgage!
Message 6 of 13
Established Contributor

Re: Chances of getting approved for a $40,000 loan

Sounds like this loan is about 100 % of gross income. Sounds like a big stretch. Personally I would not do it 

Message 7 of 13
Valued Contributor

Re: Chances of getting approved for a $40,000 loan

Google Doug DeMuro Range Rover Carmax warranty.

I am not sure you have accounted for keeping the car running...

Message 8 of 13
New Visitor

Re: Chances of getting approved for a $40,000 loan

You'll be approved without any issue, but your interest rate might be high. If you're making thousands a week, I'd just wait a little while longer and make a bigger downpayment. 

Message 9 of 13
Frequent Contributor

Re: Chances of getting approved for a $40,000 loan


wa3more wrote:

Sounds like this loan is about 100 % of gross income. Sounds like a big stretch. Personally I would not do it 


My math said op is clearing well over 100k a year. But maybe I misunderstood his numbers.

 

Op, with those income figures, can you cut expenses and just pay cash in 5 months?

 

Message 10 of 13