Will I get approved for a 32K used auto loan?

Anonymous · ‎02-07-2011

Here is the situation. Last week I had my credit (by USAA bank) pulled to see if I would qualify for this particular car I wanted. I had 657-701 through all three bureaus. My CC's were maxed out ($6400 balance on $7K limit) and I had one personal installment loan that was still showing a balance with a $225 a month payment. Other than those two commitments and a $856 a month rent I have no other debt. They only wanted to loan me $17K. They said that my previous auto loan was for 12K and they would like to see a progression in debt handling or some garbage. What I don't get is that I got approved for that 12K loan when I made $1700 gross monthly income. My current gross monthly income is $4233!

I have since disputed the personal installment loan balance as it was paid off back in August/2010, it is now relfecting paid in full on All the bureau's. I have also paid off my CC's $0 balance w/ $2K & $5K limits. I expect my score to be in the 690-720 range now with the 0% utilization vs 90%. Score is not really the issue as they already offered me a 6.09% APR for 60 months with the 657 score. However the amount ($17K) is not going to cut it. That won't even get me a new honda civic EX now a days! LOL

So currently my debt to income ratio is:

monthly Debt payments : $0

Monthly rent payments: $856

Gross monthly pay: $4233

Sould would it be too much to ask to be approved for a $32K used auto loan for 60 months with my current credit standing?

I'm thinking USAA credit union is too conservative a lender and that If I were to try Capital One's online auto loan app. were lenders compete for your loan then I'd have a better chance at getting the amount I am requesting.

Any thoughts before I try Capital One's site? Will I get approved for $32K with a resonable APR (~6%) for a 60 month term with Capital One?

Creditaddict · ‎02-08-2011

I was thinking Capital One only goes up to 30k.

What kind of car do you want to buy anyway, lots of specials out for new and used

Anonymous · ‎02-08-2011

I didn't know about Capital One having a limit. I got a quote from them several years back with worse credit and got approved for 30K @ 12.9%. 30K might due. I'd just have to come out of pocket 4K instead of 2K.

Looking at a Corvette. It has 35K worth of modifications on it and is asking $34K (2005 C6 Z51, 43,000 miles). The car is really only worth 28.3K for a private buyer stock. I don't need it really, as I have a perfectly fine daily driver that is payed off. But I must admit the car is amazing. Plus, I'm tired of getting personal loans to diversify my credit (installment loan) This would be a good opportunity for me to show I can handle larger installment loans. Also I can't justify getting a house right now when I PCS every 18 months.

Anonymous · ‎02-08-2011

1- I had figured due to your sname that you were military.

2- Unless you are an O, USAA is really not tha best resource out there for your banking. USAA was originally Officer only and they are very conservative in their lending standards. Unless you use them for insurance, (and even that has pros and cons) there are better choices for banks out there.

3- Navy Federal Credit Union is a much less conservative institution. You should become a member, set up an allotment, and you will be very surprised what they will lend you, in both cards and term loans.

Important factor: $32K for a vehicle that by your admission is only worth $28.3 may not be able to be completely financed anywhere due to the loan to value being too high.

Anonymous · ‎02-08-2011

Thanks USMC, I was hoping you'd chim in. Seems you got the most info out there to give that I haven't already read.

I didn't know that USAA was geared torward O's at first. It seems that most of the CU's out there are more conservative. However I have heard that Navy Federal Credit Union is the best so far. But I'm going to stick with them for my Checking account and insurance. Haven't been able to find better now that I'm older and married.

Now for CC's The only 2 CC that I have are locked in at 5.9% w/ no late/overlimit fees under the "Solders and Sailors Relief Act" until I retire. The limits are high engough to help my credit but not so high that I get myself into trouble.

The value of the car was what USAA said it was worth, but they loan upto 120% of that which 32K is within those limits. I wouldn't be buying a car like this to trade it in in 2 years or daily drive it. It would be a weekend toy only.

Anonymous · ‎02-08-2011

@Anonymous wrote:

I didn't know that USAA was geared torward O's at first. It seems that most of the CU's out there are more conservative. However I have heard that Navy Federal Credit Union is the best so far. But I'm going to stick with them for my Checking account and insurance. Haven't been able to find better now that I'm older and married.

Most credit unions have troubles addressing the realities of servicemember pay, so yes they would seem more conservative.

NFCU was originally created to help those who had problems with conventional financing with a military income.

I was not telling you to leave USAA, but telling you to add NFCU membership to your portfolio. Simply buying into membership ($5.00) and setting up a small allotment from your pay would be enough to be able to play them off USAA for best deals on future financing.

Anonymous · ‎02-22-2011

Wow, I got approved for 30K at 5.74% APR* in 10 minutes!!!

I decided to not push my luck on the percentage of loan to car value so I shot for 30K, being the car was NADA'd at $28,375. Navy said, "we loan up to 125% of used car value @ as low as 3.74% APR* ", but I assume only the best credit scores would get you that kind of a loan.

Some more food for thought. On February 1st my scores were (USAA Credit monitoring) 657EX 657EQ 679TU with 91% utilization. On Feb. 20th they were (USAA credit monitoring) 713EX 693EQ 726TU with 0% utilization. I went from usaa only offering me 17K Max @7.75% APR to NFCU giving me 30K @5.74%APR* with the possibility of more. My stated income was the same on both loan requests.

*Correction* they gave me a 4.74% APR, on a used car for 60 months with a 693 score on the bureau that they check (EQ).

* Interest rate reflects a .25% rate discount for full direct deposit into a NFCU bank account.