New Member
Posts: 4
Registered: ‎02-28-2013
8k used car loan, VERY high interest rate, really low debt to income ratio, VERY low score

My car broke down and I decided to get a used truck that stickered for about $9k. After tax and license, it's like $10k. So after a $3k down payment. the only place that would give me a loan wants to charge me 24.9% APR! AND I need full coverage which is $100 more per month.


My credit score is 531 on TU. Other than school loans, I have nothing really on there. (All bad debt from when I was young dropped off). Also, I just got a $70K job this past year that allows me to start rebuilding my credit. But, I'm not sure if this is a good a way to start.


I dont' have very much expenses. Just a phone bill, car insurance, and student loan payments. Plus I also do freelance web design on the side for extra income. If I wanted to, I could pay off this loan in about 3 months semi-comfortably. However, I can't tell if that's a horrible idea or not. I could also pay most of it up front, then pay it through 12 months. Maybe a better idea? 


Other info:

They want to charge me $750 fee (which they added on to the loan amount) for being a risky "financier"

I've been shopping around A LOT for a month and a half and found this is a good price for the truck I want - low miles, reliable model, in my price range

I've never had a car in my own name and I guess they looked at that when trying to finance me.

I plan on getting a secured credit card.


If I DO plan on getting this truck, should I just pay off the loan in three months? Or should I pay it off in a year to attempt to improve my credit score for when I want to get a car I really want down the line?



There's so many variables in play, I can't figure it out! Thanks in advance.