01-14-2014 10:03 PM
I'm looking to get a personal loan from my local credit union for $4,000 to purchase a motorcycle. When speaking to the representative she told me that they would essentially have to do the loan as a "token" loan, which means that they use the motorcycle as collateral (since they don't do motorcycle-specific loans). Here's the problem: my credit is shot... my FICO was 503 the last time I checked and I'm about 99% sure it's because I let a credit card be charged off (stupid, I know). I told her that I plan to pay off the charge-off this week or early next week (which I do) and I think that's the only negative mark on my account, aside from hard inquires and an old collections account that was paid off ages ago.
Do you think it will be extremely difficult to obtain a loan for the motorcycle? It's valued at around $5,000-$5,500 and I'm asking for $4,000. I currently make an average of $12,000 per year (working 2 years, tax returns were filed as a small business so they have to divide the total $ amount by 2 to get the average). I'm currently paying $310.00 per month on a car loan, but that's the only bill I have as I live with my parents. Unfortunately that car loan hasn't helped my credit because it's a buy-here-pay-here dealership and they do not report to credit agencies.
Is it likely that I would require a co-signer? My mother, the last time we checked, had a FICO score of around 623.
01-15-2014 04:31 PM
Welcome to the forums. I think you will find that if you spend some time here you will gain a lot of knowledge in how the credit world works.
I hate to be the bearer of bad news but in my opinion I do not think there is any institution which is going to accept this loan. You are looking at a very low (poor) credit score and a limited income. If you mean that you are also self employed (taxes filed as a small business) then this is just another barrier. You really need to look at from the angle of if you were the lender would you put your money at risk? Your collection account and credit card chargeoff unfortunately do not exhibit a willingness to pay the debt. The financial situation calls into question the ability to pay.
I don't mean the above to be harsh but before you consider a loan like that you need to take steps to demonstrate better credit behavior. Your best bet would be to find a credit union or bank that will offer you a secured credit card or secured (by savings) installment loan and build a positive history. When your credit scores have substantially improved (mid 600's) then you might be able to get the loan you are after. It really doesn't take as long as you would think to rebuild good history but it does take diligence. Good luck to you.
04-16-2014 08:49 AM
It's too bad no one offers semi-secured loans. You know a loan that say gives you 150% of your deposit. There are some things you just won't be able to use a secured card to do and even most of them won't bump your limit to 150% until you've had it a while. And most people don't have anything other than cash to secure a loan with
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.