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I want to "purchase" a used car in the next month or so. I just wanted to make sure I'm prepared and be successful in getting a loan without needing a co-signer.
So based on the information provided below. What are the chances of me getting a auto loan and without needing a co-signer? And should I get a loan from the bank first or get the loan through the dealership?
Credit Score: 742 FAKO EXperian - I know it is not a accurate score but let's say my true FICO Score is within 720-740
AAoA: 4.67 (Credit Cards) 2.67 (Combined with years of loans)
# of positive trade lines: 9
# of negative trade lines: 0
Income: $1,260/month
Lenght of Employment: 7 years
Previous Loan Experience: N/A in Auto Loans
Debt-to-Income (DTI): 7% - 22% (If you include my sisters loan, of which I don't pay)
Year of Car: 2010-2012
Miles: under $70,000
Purchase/Refinance: Finance
Requested loan term (XX Months): 60 or 48 months
Down payment amount: $3,000
Co-borrower/Co-Signer: No
Detailed breakdown of about information
What I am hoping to buy:
Used Toyota Corolla 2010 - 2012 Mileage: Under 70,000- price around $15,500ish (with fees, tax, etc included). With $3,000 down payment. So a $12,500ish Auto Loan.
Let me start off with basic information about myself:
Age: 25
Recent college graduate, still looking for a "real" job
Have a full time job in "retail", with a position that guarantees me 40 hours each week.
I've had this job for 7 years.
My monthly income is about $1,260 a month, paid bi-weekly.
I currently live with my parents, all I pay are the utility bills but I don't plan on mentioning that (should I?). So consider my rent $0.
Debt-to-Income: $85.74/$1,260 $272.74/$1,260 (If you count sister's loan)
My FAKO Score through Experian: 742 - I know it is not a accurate score but let's say my true FICO Score is within 720-740.
The Credit Cards I have:
I pay whatever balance I have in full each month for the past 6 months or so. Credit cards I had through college. The Highest balances looks bad.
Capital One Platinum
- Credit Limit: $3,000 - Card Holder Since 2008 - Highest Balance: $524
Best Buy Store Card (Store use only)
- Credit Limit: $1,000 - Card Holder Since 2009 - Highest Balance: $933
Amazon.com Reward Visa (Chase)
- Credit Limit: $700 - Card Holder Since 2011 - Highest Balance: $696
Combined Credit Limit: $4,700 - Current Balance: $0
The Student loans I have through Sallie Mae:
Student loans taken from 2012-2013, total loan amount: $6,895 total monthly payment: $85.74 - I add more to my monthly payments.
Loan 1 - Original Amount - $1,283 - Current Balance: $1,162 - Monthly Payment: $12
Loan 2 - Original Amount - $2,522 - Current Balance: $2,175 - Monthly Payment: $24
Loan 3 - Original Amount - $1,695 - Current Balance: $1,535 - Monthly Payment: $16
Loan 4 - Original Amount - $1,842 - Current Balance: $482 - Monthly Payment: $14
Loan 5 - Original Amount - $1,675 - Current Balance: $1,541- Monthly Payment: $16
Other Loans:
My younger sister was in a pinch and needed to take a loan for a car (yeah, she got a car before me). She needed a co-signer and I "had" to sign on the loan. So this loan is a co-signed/joint loan:
Co-signed/Joint Auto Loan
Original Amount: $5,121- Current Balance $2,877 - Monthly Payment: $187
I know I am responsible for my sister's loan because I co-signed and it does appear on my credit report. She hasn't missed a payment.
So with that in mind, my combine current loan amounts is: $9,772
Monthly total payments: $272.74 ($187 my sister pays).
You would stand a very good chance of being approved. I'm assuming the income listed is gross? If so your max monthly payments (DTI at 45%/best risk level assumed) would be around 567. Including a loan payment on $12,500 for 60 months at 2.99% your combined payments would be 496, under the max. Does the $12,500 include tax and title as well?
As far as where to go a dealership will shop around for you and can offer multiple lenders/rates. The advantage of going to your bank if they offer competetive rates is they will use their internal score to help in deciding the risk level you belong in. Assuming you have had a good relationship (years you've been a customer, do not overdraft account, consistent deposits, decent balances, etc) this can help with putting you in the top RL, although looks like your credit history is good so this would not be needed.
Background - 6+ years in banking during/after obtaining finance degree - includes formal credit training for consumer and business lending.
Perfect, I would say you will not have an issue applying by yourself at this point.
So the amount I have in student loans and co-signed auto loan for my sister won't hurt my chances right?
Correct, including those loans your income would still be sufficient to serve your total debt. Big benefit of living at home and not having a housing payment of some sort.
That's a sigh of relief for me. Was worried about the loan I co-signed would really hi dear my chances. Thanks you so much for answering my questions!
Not sure if you can answer this one. But when buying a car and taking auto loan. You need to be insured. I've never own a car but have driven my parents cars. Thus I am insured under their car insurance policy. When the time comes can I use my parents insurance (again, I am listed under it.) at time time of the purchase and taking out the loan or must I first set up my own?
If you live in the same household, in 99% of states, you'll be fine staying on your parent's insurance if you choose (just have to list the car on their insurance, obviously).