New Member
Posts: 1
Registered: ‎11-06-2007

Personal Loan Question

I was just wondering if anybody had any idea on how much of a personal loan I could take out with only about a year of credit history.
I'm 19 and I got my first credit card back in September of 2006. Now, I have three credit cards:
Chase - 1200 Limit
Citibank - 1700 Limit
AMEX - No Preset
No late payments on any of them and very low (less than 5 percent) balance all together.
I want to get a car but my insurance is astronomical. So, financing is out of the question for right now. So I figure I could take out a personal loan and pay the entire car off with the loan so I am not forced to put collision on my insurance. About 6 months back, I was approved for financing an $8000 car. I couldn't follow suit though, because my insurance was too high.
But when I apply for a personal loan of $5000, I am denied. Any particular reason for being approved for financing a car but not for a cheaper, personal loan? I'm guessing it's going to be almost impossible to get a decent loan with such a short credit history?
Thank you in advance.
Epic Contributor
Posts: 22,695
Registered: ‎10-23-2007

Re: Personal Loan Question

a car loan uses the value of the car as collateral.
a personal loan is an unsecured credit line... no collateral
A personal loan large enough to pay for a car at your age I think will be next to impossible, but car loans probably no problem all day long.
maybe shop around your car insurance, State Farm, Nationwide, $1000 detuctable vs $250-500 and lower benifits, like 50-100-50 or 10-50-10 vs normal full coverage of 100-300-100 will all save you ton on car insurance.
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Valued Member
Posts: 39
Registered: ‎04-07-2007

Re: Personal Loan Question

If there is a lien on the car most lien holders will not let the deductible be more than $500.00 dollars. Insurance is there to protect your assets so carry enough to pay for the damage you would do to the types of cars in your area. If you do not have enough coverage to pay for the damage you cause they can come after you for the difference.
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