Refinancing Auto loan or take personal loan?

[Anonymous]

Hi,

it's been a while and I let the topic rest for a while, but now it's come up again. Dear mods, if there is a better place to ask about pesonal loans (I didn't see a subforum but maybe I've missed it?) could you move my post?

I'm considering taking out a small (<5,000) personal loan to pay off my car loan and cover some other expenses that have come up. But, I'm reluctant because I'm worried that my request will be denied because of low credit score and short credit history.

I have a credit history of about 18 months, which isn't great.

I have one credit card with a 1,000 limit that I'm using frequently and pay the full balance each month.

I have a sceond credit card (Barcley's) with a 2,000 limit, that I used to buy a Macbook with 0% APR for 18months, that I'm slowly paying off, but still have a fairly high balance because I only got in December.

I have a small car loan  (<4000) that I've been paying of since January 2016.

Because of my second credit card, my score dropped and according to my FICO from Experian is in the 660s - which isn't great, obviously.

Do you think there is even a chance I could get a small personal loan with that score and my very short credit history? Or is it too risky?

Thank you very much, any thoughts are much appreciated.

[Anonymous]

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@Anonymous wrote:

Hi,

it's been a while and I let the topic rest for a while, but now it's come up again. Dear mods, if there is a better place to ask about pesonal loans (I didn't see a subforum but maybe I've missed it?) could you move my post?

I'm considering taking out a small (<5,000) personal loan to pay off my car loan and cover some other expenses that have come up. But, I'm reluctant because I'm worried that my request will be denied because of low credit score and short credit history.

I have a credit history of about 18 months, which isn't great.

I have one credit card with a 1,000 limit that I'm using frequently and pay the full balance each month.

I have a sceond credit card (Barcley's) with a 2,000 limit, that I used to buy a Macbook with 0% APR for 18months, that I'm slowly paying off, but still have a fairly high balance because I only got in December.

I have a small car loan  (<4000) that I've been paying of since January 2016.

Because of my second credit card, my score dropped and according to my FICO from Experian is in the 660s - which isn't great, obviously.

Do you think there is even a chance I could get a small personal loan with that score and my very short credit history? Or is it too risky?

Thank you very much, any thoughts are much appreciated.

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I don't think there will be anyone who can answer your question defininitively, my suggestion would be to work with a credit union and see what options they offer. Understand though that unsecured loans like this always carry higher interest so your not likely to get anything less than 16 percent at best and likely more with the scores you have.  SInce your car loan is pretty small I would probably focus as much as my efforts as possible on making extra princple payments on that car loan and get it paid off asap. Wish there was an easier answer but I don't think there is but like I said touching base with a credit union to discuss options is a good use of a few minutes of your time.

[Appleman]

There is a Personal Finance section above where you can post about Personal Loans.

As you have experienced the high utilization is depressing your scores. The second credit card will help once you get the utilization down. Milestones for score improvement may include paying balance to below 90% (90% is considered maxxed out), below 70%, below 50%, below 30% and below 9% reported utilization.

Try Lending Club, Prosper and SoFi.com to see if you qualify. All have a SP pre-qualify option last I checked.

[NichelleN]

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@Appleman wrote:

There is a Personal Finance section above where you can post about Personal Loans.

As you have experienced the high utilization is depressing your scores. The second credit card will help once you get the utilization down. Milestones for score improvement may include paying balance to below 90% (90% is considered maxxed out), below 70%, below 50%, below 30% and below 9% reported utilization.

Try Lending Club, Prosper and SoFi.com to see if you qualify. All have a SP pre-qualify option last I checked.

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Agreed. If you go to one of the suggested sites (Lending Club, etc), you can key in your info and get a rate without a hard pull. If you choose to finalize the loan, they will then complete a hard pull. I used Lending Club in the past when I needed a quick $15K loan due to some unexpected major expenses. My score was similar to your score and had a rate of 11%. Including all fees, etc it was actually around 16%. Of course, results will vary. It was a 3 year loan that I paid off in less than a year.