New Member
alfstein
Posts: 2
Registered: ‎11-16-2012
Possible to get an auto loan with a defaulted perkins loan on CR?

This is the short and tall of it:

 

I recently checked my credit score and as of this month my EQ/TU is 636/640.   I have a defaulted federal perkins loan ($4700)  that I finally tracked down last month - it went into default in 2010 (whoops!); and I'm in the process of rehabilitating.  From reading the forums, I understand it will take 9 months to even be returned to the Dept or Edu for the original amount of $3000.   I've moved, was completely disorganized for years, etc etc.. basically a mess.  But, I'm trying to get back on track.  I opened a secured credit card through my bank about 6 months ago (though it's only a low balance... $300), I keep the balance super low and make payments monthly to establish revolving credit.  I believe my score has vastly improved in the last year alone, but I'm wondering if I'll be able to qualify for an auto loan while I still have the defaulted student loan on my CR.

 

I have very little established credit, besides this one loan that went rogue.   My other student loan was for $4500 and I've paid it on time every month for the past 10 years, and there's only about $1000 left on it.  

 

I opted for the loan rehab rathern than settling because I assumed in the long run it would look better on my report to have it come out of defaulted status rather than just paid/closed.  Was I incorrect in doing so, should I have just paid it in full? 

 

Will I even be able to get an auto loan, if I my own bank wouldn't  grant me one?  I applied for a 13k used auto loan with Wells Fargo, having banked with them for 10+ years, have a savings, and secured cc with them, and I didn't even qualify for even a 12% loan because of my delinquent student loan and lack of other credit.  What should I do?  Should I hold off on purchasing a newer vehicle til my default status is resolved? 

Community Leader
Senior Contributor
laz98
Posts: 4,334
Registered: ‎09-06-2008
Re: Possible to get an auto loan with a defaulted perkins loan on CR?

No, I think you are better off doing the rehab.  If possible, I would wait until you are done with the process before car shopping.  It will help you a lot.

Latest scores: Walmart TU: 769. MyFICO TU: 769. DCU EQ: 716. MyFICO EQ: 780. PSECU EX: 756. MyFICO EX: 780.
Moderator Emeritus
llecs
Posts: 32,881
Registered: ‎08-04-2007
Re: Possible to get an auto loan with a defaulted perkins loan on CR?