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income and auto loan amount

Established Member

income and auto loan amount

Currently i am paying 320 a month on a 10k car because my credit was limited. I have had the car for 10 months and want to trade. Nothing bad is in my credit at all. My income is about 16k. I have been making payments at this amount early every month. With this payment i could have a much newer and nicer vehicle. Would my income be an issue for a car that is 20-22k? Before i got my car my score was 641. I'm sure it has increased I just haven't checked. Only have two student loans and the one auto loan. No negatives at all. I also have enough for down payment also
6 REPLIES
Frequent Contributor

Re: income and auto loan amount

Yes it would be and you would have problems getting approved without a co-signer. Income these days plays a large part in the approval process. That's not enough income to support a $20K car loan. Even if you got approved for 0%

Established Member

Re: income and auto loan amount

I just don't understand how it's okay for me to pay that much a month for an older car with no problem and not a newer one. I used a financial calculator and calculated loan amount, tax, down payment etc and my payment would almost the same.
Moderator

Re: income and auto loan amount

What is your current rate?

Have you figured out the current value of your vehicle?

What will do you with the negative equity that you have on the current vehicle - roll it into a new loan or pay it off before you finance a new vehicle?

 


Because you have such a high interest loan, you probably have not really paid down any principal balance. It is not possible to know without knowing all the figures (rate, term, initial finaced amount, etc). In order to find out if you have the ability to trade, you need to find out the current information first. It is a big stumbling block for you unless you pay off the negative equity before you trade it.

 

 

Established Member

Re: income and auto loan amount

I owe 2500 more than its worth so i have the money to pay it and 3000 extra for down payment. My bank has a rate of 3% and i would do it at 72 months since i don't plan on getting another car for a long time. Tax is 9% here
Moderator

Re: income and auto loan amount


tweetylove0405 wrote:
I owe 2500 more than its worth so i have the money to pay it and 3000 extra for down payment. My bank has a rate of 3% and i would do it at 72 months since i don't plan on getting another car for a long time. Tax is 9% here

Since you have the additional funds to pay off the negative equity, it would be far better for you to sell your current vehicle privately so you get top dollar rather than trade it.

Then start fresh with a new loan with your CU. Trade in value is typically at wholesale value or less if the dealer can get away with it. If you go in without a trade, you can negotiate a better deal on the new vehicle especially if you have CU financing in hand.

Valued Contributor

Re: income and auto loan amount

Just refi your current loan.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%