topic Re: Auto loan with high credit utilization in Auto Loans

Auto loan with high credit utilization

Anonymous — Wed, 26 Mar 2014 00:39:50 GMT

I'm looking at purchasing a new SUV for around 42,000. I'll put 5500 down and trade in my vehicle which should add another 3000. So the total I'd need to finance would be about 33,200. I belong to Navy Fed, PenFed and DCU. My FICO scores are 704, 704 and 709 but I have a high credit utilization (79%). I make about 145,000 a year. I have about 50000 in cc debt, a 500k mortgage (even though my husband pays that it still shows up as my debt on my credit report) and about 50k in student loans. I also have a personal loan with Navy Fed that has a balance of 29k so I'm not sure if they'll give me an auto loan too. What are the chances I'll be approved for a 60 month loan for about 33k by myself with no cosigner? I can definitely make the payments work by myself but I'm worried they'll think it's too much and I won't be approved.

Thanks!

Re: Auto loan with high credit utilization

Remember0 — Wed, 26 Mar 2014 01:53:20 GMT

Aggregate minimum monthly payment across all credit cards?

Monthly mortgage payment?

Aggregate minimum monthly payments on all student loans?

Finally monthly payment on NFCU personal loan?

Re: Auto loan with high credit utilization

Anonymous — Wed, 26 Mar 2014 02:03:38 GMT

Minimum credit cards 1369

Mortgage 3500 (even though I don't pay this)

Student Loans 740

NFCU Personal Loan 740

Re: Auto loan with high credit utilization

BigBS — Wed, 26 Mar 2014 02:10:57 GMT

@Anonymous wrote:
Minimum credit cards 1369
Mortgage 3500 (even though I don't pay this)
Student Loans 740
NFCU Personal Loan 740

I would probably include the additional $3500 as 'Other income' because I think your DTI will be tough to manage for an auto loan.

Re: Auto loan with high credit utilization

Remember0 — Wed, 26 Mar 2014 02:16:49 GMT

Here's the issue:

Let's say we go ahead and don't count more than 50% of the mortgage. Most banks will take at least 50% of it since you're joint. For example DCU does.

Your DTI = (1369+3500/2+740+740+550 (imputed car loan payment w/ principal of 33k, 65 months, @ a VERY low 2% which I don't think you'd qualify for))/(145000/12)=43%

Some finance companies will technically do it, but it's pushing it especially with the high util. You can try applying at a CU like DCU. Don't be surprised if they reject or only approve for 20k though. A dealer, I'm guessing, will push it through, but your APR won't be pretty imo. Is there a reason your husband can't co-sign? If he makes more money, it'll greatly help.

EDIT: @bigbs: let's say she did, it won't dent DTI much...you can't argue they need to split the 3500 by 2 at this point in the numerator.

DTI = (1369+3500+740+740+550)/(145000/12+3500)=44%. Back to square one...

Re: Auto loan with high credit utilization

Anonymous — Wed, 26 Mar 2014 02:19:36 GMT

Everything on my credit report is very good or excellent except my credit utilization. My average age of credit is 11 years, I have no derogatory remarks or any negatives on my credit file. Never missed any payments and always paid more than minimum. I have had a previous car loan with NMAC that was always paid on time and is paid off.

He technically could cosign but I would just rather not. It's just not an ideal situtation. But if I have to do it I will.

Is DTI relied upon more than a FICO score? My credit karma auto insurance score is 853. Not sure if that makes a difference.

Re: Auto loan with high credit utilization

Remember0 — Wed, 26 Mar 2014 02:21:56 GMT

Yes, no denying your credit score is high. But lenders typically won't lend unless DTI makes sense.

Honestly, with a 760+, a 45% DTI might pass off. You could try DCU, but I doubt it'll work there. Your best chance imo is at the dealer with a captive lender. What car did you want to buy?

Re: Auto loan with high credit utilization

Anonymous — Wed, 26 Mar 2014 02:23:34 GMT

Was looking at a Jeep Grand Cherokee or Nissan Pathfinder 2014. NFCU has been really good about giving me loans without a cosignor but I didn't know if they'd do an auto loan when I have a personal loan out already with them.

Re: Auto loan with high credit utilization

Remember0 — Wed, 26 Mar 2014 02:31:28 GMT

You can try NFCU.

Either way, I'm pretty sure NMAC or Chrysler Capital will approve. Just for mortgage you can't give the full 3500 imo. I'd do half on the app since it's a joint mortgage and explain that if they ask. Also be sure you get NMAC/Chrysler's best rates (look up their promo financing offers for your models on jeep/nissan's website). If approved, you should be able to get the best rates.

Re: Auto loan with high credit utilization

Anonymous — Wed, 26 Mar 2014 02:36:11 GMT

Thanks! And good idea on the mortgage. I never thought to give half on applications. I plan on saving up for the downpayment the next 2 months and then just try them all and see what I get. I checked the auto loans section on credit karma and they suggested nationwide or capital one saying I have a good chance of being approved with my score and credit utilization for 3.5-4.5% so might look into those if my credit unions say no.

Re: Auto loan with high credit utilization

Anonymous — Wed, 26 Mar 2014 02:41:33 GMT

Cap One, or PNC would proably approve you with the equity in the unit. If your mortgage is joint most auto lenders will assume additioal income with your scores and payment history. If you where combining a high LTV along with the debt ratio issue then you would have more of a problem.

Cap one offers a blank check program and PNC (if you live in their area) does a Check Ready program. I think you would be fine for either of these.

Re: Auto loan with high credit utilization

Anonymous — Wed, 26 Mar 2014 02:42:54 GMT

Thanks for your help!