Should I apply for an auto loan yet? NFCU

[Etno]

Hello!

I have been a member of Navy Federal for about 3 months. I am waiting on my direct deposit to be transferred over, and I have no lines of credit with them yet.

My husband has 2 collection (4-5 years old) that are unpaid, and I have one medical collection ($400) that I am PFD, but is currently showing as closed collection. I have one secured card and he has two credit cards, all are reporting under 9% utilization and no late payments (we have had them almost a year). Our scores are both around 610, my lowest score is 597.

We really need to replace our car, is there any chance we would get an auto loan? We can make a good size downpayment. We could probably buy a cheap car outright, but I would like a reliable car (around 10k), plus I am hoping the extra tradeline may help us because we don't have a lot of positive accounts.

[coreyb80]

I would give it a shot.  Credit unions are more lenient than your normal financial instituion.  They will more than likely call you and ask for an explanation.  That is what happened with me.  I got denied by my local CU because I was fresh off a chapter 7 and they wanted to see 12 months of payment history.

[Etno]

Would I have a shot applying with unpaid collections since they are older? I am negotiating with them to pay them off, but they are tough to negotiate with.

[trumpet-205]

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@Etno wrote:

Would I have a shot applying with unpaid collections since they are older? I am negotiating with them to pay them off, but they are tough to negotiate with.

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While you may get an auto loan, it is not going to be in favorable term (high interest rate and big down payment).

When you said your car needs to replaced, is it about to brake down? Or you simply want a newer car?

[Shogun]

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@trumpet-205 wrote:

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@Etno wrote:

Would I have a shot applying with unpaid collections since they are older? I am negotiating with them to pay them off, but they are tough to negotiate with.

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While you may get an auto loan, it is not going to be in favorable term (high interest rate and big down payment).

When you said your car needs to replaced, is it about to brake down? Or you simply want a newer car?

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+1  Weigh your options, do you need or want?  What kind of interest am I getting?  I will say that a CU generally is more forgiving with the past.  YMMV  Good Luck!

[Etno]

I don't need a car right now, but my current car (we only have one) is having mechanical problems to the point where I can see within the next 6 months it will need to be replaced. I own it outright and it is worth around $8,000. My reason for posting is to see if I would get a favorable loan through NFCU with the open collections so I can avoid the maintenance issues, or if I would benefit from paying the collections. Basically, if a higher down payment but old open collections or a lower down payment and paid collections (not deleted) would offer a better chance of getting a loan.