Need another auto loan after credit card settlement

[keny01998]

Hi,

I would like to apply for another auto loan; however, I have some negative marks in my reports due to settlements with credit card companies. I settled with most of my cards in August 2010 and now they are showing as settled or paid less than full balance in three of my reports. Before the settlement, I got 30, 60, 90, 120 days late with those credit cards and I'm worry about them when I want to apply for another loan. Everything is settled as of January 2011 and I saved about $30,000. Most of my settled cards are closed and I only have a few small cards left, never late on them.

What is my chance to get another auto loan according to my report? I want to apply from my credit union because I have two active loans with them now and they say I can get another one. I'm shooting for $20,000 loan.

Mortgage: 30 years fixed at 5%, balance $155,200

Auto 1: 5 years, balance $11000

Auto 2: 6 years, balance $18000

Credit cards: $5500

 Scores: 575 equifax, 562 Transunion from fico.

Income: $5000 take home

[Creditaddict]

Why a 3rd with such high balances on the 3 you have already?

I wouldn't think with those scores it would be an easy deal, and if approved probably very high interest, but the other 2 positive auto loans may be making your auto enhanced fico be higher.

[cdtotten]

I agree that in your situation this is not the right time at all to take out another auto loan. You have 2 with high balances, and you have a lot of CC debt after saying you just settled on a bunch of credit cards already. I'm glad you saved so much money by settling, but settling for less on multiple accounts has killed your credit score and made you a high risk to any potential lender for the next 5-7 years. I can't forsee any lender who would want to lend you anything at this time.

[keny01998]

Thanks guys. I guess I will continue to pay off my two auto loans. I spoke with my local credit union and they said I'm qualified for another loan up to $15k at 17% for 60 months due to my recent settlements. I have 3 paid auto loans and several installments in my credit and those were the main factor for my approval; however, 17% is pretty high for now and my equifax fico is 590 as of 3/4/2011.

[cdtotten]

17% for 5 years would be a very dumb mistake to make. You would be upside down in your car so fast it wouldn't even be funny. Anything over 10% is unadvisable at this point in time.

A $15,000 auto loan at 17% for 5 years:

Payment: $372.79, and you will have paid $7,367 in interest. Heck your payments in the first year will go more to interest than principal.

Resist the temptation - wait until you are in better financial shape to make a big purchase.