topic Re: Do I qualify (Thingy) (Auto Loan Time) in Auto Loans

Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Wed, 10 Feb 2016 16:02:24 GMT

Well getting a house right is out of the question.. I have such a thin Credit File (Aside from all the baddies I have had removed)
I'm currently driving a 16 year old car, and I'm getting tired of shoving money into it. SO! I've decided.. We're going down the road of Auto Loan!

I'm going to go look at the Car on Saturday. I don't expect Cap1 will be reporting the zero balance at that time. Should I take proof of payoff of the credit cards?
Or maybe call the credit bureaus?

HERE WE GOOOO:

Credit Score: 600-610 (I expect it to go up 20+ points. I just paid off my credit cards to zero balances)

AAoA: File is 7 years old. AAOA is 3-4 years?

# of positive trade lines: 2 Credit Cards. ($1600 Limit between the two)

# of negative trade lines: 2 - Mediacom (For $175, which I can pay off and get a letter of payoff) and Sprint for $1056.

Income: $37,700 (This increases every year as we are on union contract with contracted raises throughout the year. 2 raises a year)

Length of Employment: 8 Months

Previous Loan Experience: None. Only Student Loans. I bought my current car outright.

Debt-to-Income (DTI): $300 a month. I do not pay for where I live right now. My boyfriend pays the mortgage.

Year of Car: 2013

Miles:33,000

Purchase/Refinance: Purchase

Requested loan term (XX Months): 60 Months. will consider 72 if ABSOLUTELY Necessary.

Down payment amount: Would like to put down as little as I need to. But up to $3000

Co-borrower/Co-Signer: Available. Would REALLY rather not use. It's my father, and he really needs to stop pretending he doesn't need a new truck, its in worse shape than my car, but his credit score is in the 800's.. That man is a credit genius.

Other:

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Wed, 10 Feb 2016 16:20:32 GMT

I don't think there's any way you'll get the benefit of your card being paid down if it hasn't reported. So if you have them run your credit at this point, you'll likely be paying for the high utilization for as long as you keep that loan. I know there's a car you want to see Saturday, but if your cards won't have reported, I'd think I'd roll the dice on the car being gone. When does your Cap One statement close? I don't know if Cap One is one who will update mid-cycle. Chase automatically does if you pay to $0. Discover will report mid-cycle if requested (I hear, never tried it). But I don't know about Cap One. Hopefully someone will chime in, or do some searching.

For DH's truck, we went with dcu.org last summer. I'd highly recommend checking them out, at least calling them. There's a loan calculator on their site https://www.dcu.org/loans/auto-loans.html#rates

It has you choose excellent/good/below average etc. credit. I called and asked what that meant and was told good started at 620. I'm not sure how accurate that is, but that's what I was told. I know they use EQ, but I can't recall which EQ score. It's not the one you get on myfico monitoring, again some searching may help. But if you're in the ballpark of that number, when you look at different rates you might get, you can see that it could be worth waiting.

Alternatively, you can just get the car at whatever rate and plan to refinance down the line. I know sometimes a reliable car is more of a need than a want. And sometimes you just gotta do what you gotta do.

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Wed, 10 Feb 2016 16:47:53 GMT

@Anonymous wrote:
I don't think there's any way you'll get the benefit of your card being paid down if it hasn't reported. So if you have them run your credit at this point, you'll likely be paying for the high utilization for as long as you keep that loan. I know there's a car you want to see Saturday, but if your cards won't have reported, I'd think I'd roll the dice on the car being gone. When does your Cap One statement close? I don't know if Cap One is one who will update mid-cycle. Chase automatically does if you pay to $0. Discover will report mid-cycle if requested (I hear, never tried it). But I don't know about Cap One. Hopefully someone will chime in, or do some searching.

For DH's truck, we went with dcu.org last summer. I'd highly recommend checking them out, at least calling them. There's a loan calculator on their site https://www.dcu.org/loans/auto-loans.html#rates

It has you choose excellent/good/below average etc. credit. I called and asked what that meant and was told good started at 620. I'm not sure how accurate that is, but that's what I was told. I know they use EQ, but I can't recall which EQ score. It's not the one you get on myfico monitoring, again some searching may help. But if you're in the ballpark of that number, when you look at different rates you might get, you can see that it could be worth waiting.

Alternatively, you can just get the car at whatever rate and plan to refinance down the line. I know sometimes a reliable car is more of a need than a want. And sometimes you just gotta do what you gotta do.

I believe One closes the 3rd of the month. The other closes on the 19th. (Close dates are the day before a statement comes out correct?)

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Wed, 10 Feb 2016 17:53:07 GMT

I was using them interchangeably. Statement/Close.

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Wed, 10 Feb 2016 18:06:35 GMT

Ah then, the 4th and the 20th

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Wed, 10 Feb 2016 21:25:27 GMT

GOT APPROVED At a local Credit Union in my area at 8.49% with a Co-signer.
Or 15.5% Through Ally bank by myself with $1,000 down.(I had up to $3,000 to put down but I didn't tell them that..) I asked what the difference in payment would be if I put $2000 down. It only changed it $20 a month. So i'll keep the money in my pocket.

While I know my father would be more than willing to co-sign. I can't allow him to. His truck is falling apart, I don't even know how he drives the thing.

I think I'm going to with the 15.5% and Re-finance in a few months. What do you guys think?

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Wed, 10 Feb 2016 22:20:38 GMT

Going in on Saturday to purcahse the car..

I know this is totally way too soon but how "soon" can you refinance a car? I would really rather not hover around 15% for the entire length of the loan.

What are the basis for refinancing?

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Thu, 11 Feb 2016 00:05:11 GMT

Wow that rate is crazy high. Honestly, if I were you, and you can still drive the car, I would hold off until your scores rise some.

There is no guarantee that you can refinance it later. Have you tried Cap1's site to see if they pre-qualify you for a loan and what their rate is? Is this dealer financing or did you apply to Ally directly. I would hate to see you get upside down on the car and not even be able to refinance it later.

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Thu, 11 Feb 2016 00:27:00 GMT

@Anonymous wrote:
Wow that rate is crazy high. Honestly, if I were you, and you can still drive the car, I would hold off until your scores rise some.

There is no guarantee that you can refinance it later. Have you tried Cap1's site to see if they pre-qualify you for a loan and what their rate is? Is this dealer financing or did you apply to Ally directly. I would hate to see you get upside down on the car and not even be able to refinance it later.

I suppose my question is why wouldn't I be able to refinance down the road? This was an application through the dealership financing.
Cap1 wants me to put $5000 down at 13%

Back in 2013 I was approved at 23.75%

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Thu, 11 Feb 2016 01:14:37 GMT

I'm not sure how much equity you will have in the car starting out, but at that high of a rate, you may be eating into it rather quickly depending on the length of the loan (you mentioned 60 months). There are a lot of lenders that only refinance up to 100% of the vehicles value, there are some that go as high as 120%.

Did they tell you your current auto scores they used and how far you are off for better financing terms?

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Thu, 11 Feb 2016 01:45:33 GMT

@Anonymous wrote:
I'm not sure how much equity you will have in the car starting out, but at that high of a rate, you may be eating into it rather quickly depending on the length of the loan (you mentioned 60 months). There are a lot of lenders that only refinance up to 100% of the vehicles value, there are some that go as high as 120%.

Did they tell you your current auto scores they used and how far you are off for better financing terms?

The Credit Union that approved me at 8% with a co-signer stated that the vehicles value was $27,800. I have it out the door at $23,000.

577 is current auto score from Equifax.
Would depend on when my zero balance on my credit cards report.

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Thu, 11 Feb 2016 13:45:29 GMT

It's possible to refi a car right away. If you read threads in this forum, there are people who do it after a week or two. We've done it in about that amount of time before as well. But remember that's another new tradeline and then another that will impact your AAoA and credit score.

Also, just to make sure you know what you're getting yourself into, you'll be paying almost $300 interest per month ($23k for 60 months @15.5%) vs $170-ish at 9% (6% would be down at $115). So each month you would keep the 15% loan, you're putting out another $130 over the 9% loan. Again, when a car is a need, you sometimes gotta do what you gotta do. And sometimes just knowing those parameters can motivate one to get things done more quickly.

IF you decide to go for the car now, here's an idea that I would have never thought to do before finding this place. One of the dings on your credit with a new loan is the loan balance to original loan amount ratio. If you have $3k to put towards the car, but they'll take $1k, go ahead and do that. But then immediately, when you get your account number etc., pay down the $2k towards the loan. Then you're starting at about 91% rather than 100% of the original balance owed. Plus, since so much of your payment will be going to interest, as the car depreciates, this will help protect against you getting upside down (you have good equity now, but...). Be sure to check with the lender that the extra payment can be applied to principal. If you just send it off they'll likely just apply it to future payments and you'll still be paying interest on the whole original loan amount. (This should also have the extra benefit of lowering the interest paid, as long as the lender will apply it to principal.)

ETA: Just in case you haven't used a calculator like this: http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx If you click 'show amortization' it shows how much you pay toward principal and interst.

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Thu, 11 Feb 2016 14:34:18 GMT

@Anonymous wrote:
It's possible to refi a car right away. If you read threads in this forum, there are people who do it after a week or two. We've done it in about that amount of time before as well. But remember that's another new tradeline and then another that will impact your AAoA and credit score.

@Also, just to make sure you know what you're getting yourself into, you'll be paying almost $300 interest per month ($23k for 60 months @Anonymous.5%) vs $170-ish at 9% (6% would be down at $115). So each month you would keep the 15% loan, you're putting out another $130 over the 9% loan. Again, when a car is a need, you sometimes gotta do what you gotta do. And sometimes just knowing those parameters can motivate one to get things done more quickly.

IF you decide to go for the car now, here's an idea that I would have never thought to do before finding this place. One of the dings on your credit with a new loan is the loan balance to original loan amount ratio. If you have $3k to put towards the car, but they'll take $1k, go ahead and do that. But then immediately, when you get your account number etc., pay down the $2k towards the loan. Then you're starting at about 91% rather than 100% of the original balance owed. Plus, since so much of your payment will be going to interest, as the car depreciates, this will help protect against you getting upside down (you have good equity now, but...). Be sure to check with the lender that the extra payment can be applied to principal. If you just send it off they'll likely just apply it to future payments and you'll still be paying interest on the whole original loan amount. (This should also have the extra benefit of lowering the interest paid, as long as the lender will apply it to principal.)

ETA: Just in case you haven't used a calculator like this: http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx If you click 'show amortization' it shows how much you pay toward principal and interst.

You have been so incredibly helpful, it blows my mind!!
That's exactly what i'll do (after talking to ally and seeing if it will be applied to the princple). Then turn around and try and refinance within 3-6 weeks. Although I have no idea how to do that, or how to go about refinancing. Hell I barley knew anything about buying a car. You guys have been so helpful through this whole thing!!

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Thu, 11 Feb 2016 14:42:17 GMT

I'm a bored math teacher on vacation avoiding housework and schoolwork.

I still vote for calling up DCU and asking about scores and APR's. You may get someone who will talk and you may not. Worth a phone call. You could do it now just to see, or wait until your scores go up and you might be able to move ahead.

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Thu, 11 Feb 2016 15:02:51 GMT

@Anonymous wrote:
I'm a bored math teacher on vacation avoiding housework and schoolwork.

I still vote for calling up DCU and asking about scores and APR's. You may get someone who will talk and you may not. Worth a phone call. You could do it now just to see, or wait until your scores go up and you might be able to move ahead.

I actually applied at DCU yesterday and haven't gotten a call back
I'm going in Saturday to sign off on paperwork.
Maybe DCU will refinance my car? Or Cap1 -
I'm noticing people with scores around 550-570 getting Rates ariound 7%.. so I'm like mannnnnn...
But I mean I turned my car on this morning and it turned off 4 times on the way to work..and i only drive 4 miles to work -_-
16 year old car and I've had it for 10 years. Ester is starting to turn against me!!! (Yes I name my car, don't jude me lol)

Re: Do I qualify (Thingy) (Auto Loan Time)

MrsCHX — Wed, 17 Feb 2016 15:47:12 GMT

Did you get the car or any better option from DCU??

My scores are just slightly higher than yours and I'm looking to purchase in 4-6 months. IF my current car -- that's 12 years old and was previously in a major accident before I bought it-- lasts that long!

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Wed, 17 Feb 2016 15:59:47 GMT

@MrsCHX wrote:
Did you get the car or any better option from DCU??

My scores are just slightly higher than yours and I'm looking to purchase in 4-6 months. IF my current car -- that's 12 years old and was previously in a major accident before I bought it-- lasts that long!

I did indeed get the car through ally bank at 15.5% Although my payments aren't optimal I am very happy with the choice I have made to build my credit. I will likely be attempting to refinance within the next 6 months.

DCU never contacted me. I put in an application to them last Wednesday 2/10 and never heard anything back. Looks like they did do a Hard credit pull but I was never contacted.

Few Suggestions - if you're new to car buying:
• Try to get pre-approval from your local CU. I had one at 8% from my local CU but I needed a co-signer and I didn't want to have to have one. My Local CU let me know to make payments on my car for 3-6 months and re-apply. The only reason I needed a co-signer was because of my length of employment (8 months) and lack of credit. (I only have 2 credit cards) This gives you so much leverage.

• Put down the LEAST you can. I had $3000 to put down, but I didn't tell the dealership that. I only put $1000 down. I called ally and asked them if I can pay $2000 towards the principle of the car. (Since my payments do not begin until March 28th). They said yes. So I'm already coming into my loan with $2000 shaved off the top of it I already bought the car $3000 under black book value, so now I"m $5000 ahead.. I'd like to stay ahead especially if I plan on re-financing.

•Get GAP insurance through your own insurance if you can. Allstate allowed me to get my GAP insurance for an added $24 a year. The dealership was selling it for $700

Re: Do I qualify (Thingy) (Auto Loan Time)

MrsCHX — Wed, 17 Feb 2016 20:25:34 GMT

Aww, congratulations!!!!

Re: Do I qualify (Thingy) (Auto Loan Time)

Anonymous — Wed, 17 Feb 2016 22:16:59 GMT

Nice car, Invader!! Hopefully your CU will work with you in 6 mos. I'm in kinda the same spot, except my car isn't dead, but it keeps needing expensive repairs. I'm in a very good financial situation now, except my credit score sucks. I wanna get another car, and I plan on taking the poopy interest rate for a couple months til my CU will work with me (they said they wanna see 6 mos of good credit use post BK).