topic Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%? in Auto Loans

Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

jmcmillan — Sun, 28 Mar 2021 18:05:51 GMT

I know it might be a stretch, but I won't consider getting a new car unless the rate is reasonable... I'm sticking with 5% or less.

I thought about asking my local dealer to pull my credit and let me know what the offers are.

This is just a different scenario than I'm used to, because I usually have an approval and check before car shopping. My bankruptcy has made that more difficult.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

Horseshoez — Sun, 28 Mar 2021 18:46:08 GMT

@jmcmillan, you haven't given us much to go on, are you currently in a Chapter 13, or did you file a Chapter 7? Have you received your discharge yet? If so, how long ago? Do you have any other issues on your credit report? What are your scores?

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

jmcmillan — Sun, 28 Mar 2021 19:34:48 GMT

@Horseshoez wrote:
@jmcmillan, you haven't given us much to go on, are you currently in a Chapter 13, or did you file a Chapter 7? Have you received your discharge yet? If so, how long ago? Do you have any other issues on your credit report? What are your scores?

My Chapter 7 discharged in December. I have 3 secured credit cards and have a FICO 8 of 627. Negatives are recent late payments on student loans, but they are all current now.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

Horseshoez — Sun, 28 Mar 2021 20:03:27 GMT

@jmcmillan wrote:
@Horseshoez wrote:
@jmcmillan, you haven't given us much to go on, are you currently in a Chapter 13, or did you file a Chapter 7? Have you received your discharge yet? If so, how long ago? Do you have any other issues on your credit report? What are your scores?

My Chapter 7 discharged in December. I have 3 secured credit cards and have a FICO 8 of 627. Negatives are recent late payments on student loans, but they are all current now.

As I understand it, once you have three credit cars, a fourth won't be of a whole lot of benefit, however, a secured loan (aka. Credit Builder Loan or Share Loan) can have a very good impact on your scores.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

dragontears — Sun, 28 Mar 2021 20:13:41 GMT

@Horseshoez wrote:
@jmcmillan wrote:
@Horseshoez wrote:
@jmcmillan, you haven't given us much to go on, are you currently in a Chapter 13, or did you file a Chapter 7? Have you received your discharge yet? If so, how long ago? Do you have any other issues on your credit report? What are your scores?

My Chapter 7 discharged in December. I have 3 secured credit cards and have a FICO 8 of 627. Negatives are recent late payments on student loans, but they are all current now.
As I understand it, once you have three credit cars, a fourth won't be of a whole lot of benefit, however, a secured loan (aka. Credit Builder Loan or Share Loan) can have a very good impact on your scores.

The OP is looking for an auto loan so not sure why you are talking about credit cards and since they have student loans that are now current, I doubt a secured loan would benefit their scores....

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

jmcmillan — Sun, 28 Mar 2021 20:22:32 GMT

@dragontears wrote:
The OP is looking for an auto loan so not sure why you are talking about credit cards and since they have student loans that are now current, I doubt a secured loan would benefit their scores....

It wouldn't. I have other paid-off loans (including auto) that are reporting.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

Jnbmom — Sun, 28 Mar 2021 20:35:11 GMT

@dragontears wrote:
@Horseshoez wrote:
@jmcmillan wrote:
@Horseshoez wrote:
@jmcmillan, you haven't given us much to go on, are you currently in a Chapter 13, or did you file a Chapter 7? Have you received your discharge yet? If so, how long ago? Do you have any other issues on your credit report? What are your scores?

My Chapter 7 discharged in December. I have 3 secured credit cards and have a FICO 8 of 627. Negatives are recent late payments on student loans, but they are all current now.
As I understand it, once you have three credit cars, a fourth won't be of a whole lot of benefit, however, a secured loan (aka. Credit Builder Loan or Share Loan) can have a very good impact on your scores.
The OP is looking for an auto loan so not sure why you are talking about credit cards and since they have student loans that are now current, I doubt a secured loan would benefit their scores....

I agree they already have student loans reporting so they don't need a secured loan.

However with a recent BK and scores I don't think you will qualify for 5% loan at this time .

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

jmcmillan — Sun, 28 Mar 2021 23:25:37 GMT

@Jnbmom wrote:
However with a recent BK and scores I don't think you will qualify for 5% loan at this time .

Yeah I kinda had a feeling. I'm just not willing to finance a new car above 5%.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

Loquat — Sun, 28 Mar 2021 23:32:57 GMT

@jmcmillan Before I say you don't have a chance I want to ask what kind of vehicle are you looking for, what is your previous auto loan experience, what is your income, and do you have money down.

I speak as a former Finance Manager for a VERY large automotive network. I can tell you, as you'll see if you stumble across my many post around these here parts, that a good down payment, employment history, and income can overcome a multitude of financial sins. Obtaining 5% on a new vehicle is absolutely doable as long as you can mitigate some of the risk by putting enough money down.

I filed a BK13 and I was able to obtain a new auto loan with PenFed for a rate under 5%. So to answer your question, yes it's possible with a few caveats.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

jmcmillan — Mon, 29 Mar 2021 00:27:26 GMT

@Loquat wrote:
@jmcmillan Before I say you don't have a chance I want to ask what kind of vehicle are you looking for, what is your previous auto loan experience, what is your income, and do you have money down.

I speak as a former Finance Manager for a VERY large automotive network. I can tell you, as you'll see if you stumble across my many post around these here parts, that a good down payment, employment history, and income can overcome a multitude of financial sins. Obtaining 5% on a new vehicle is absolutely doable as long as you can mitigate some of the risk by putting enough money down.

I filed a BK13 and I was able to obtain a new auto loan with PenFed for a rate under 5%. So to answer your question, yes it's possible with a few caveats.

I'm looking at a 2021 Hyundai Sonata with an MSRP of $35,700. After rebates, trade-in, and down payment, I would be looking at financing $20,000 of that. I have a stable job at $50k/year, been with the company for 5 years. The only other bill outside of rent is a student loan for $285/month. I have 3 other auto loans on my credit report that were paid as agreed. But as I mentioned early, I did complete a chapter 7 bankruptcy recently.

I have purchased my last two vehicles from the same dealer, and they know I won't purchase a car unless I get a good deal. I thought about asking them to pull my credit and see what numbers they come up with.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

Shooting-For-800 — Mon, 29 Mar 2021 11:46:33 GMT

Look at CapOne Navigator prequal.

SP.

Pick a car and put down $25,000

Sort by APR

That should give you some guidelines on best APR

I just prequalled at 3.1%

With Cap One, the better the deal, the better your rate.

GL!

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

Anonymous — Mon, 29 Mar 2021 20:29:42 GMT

@jmcmillan wrote:

I'm looking at a 2021 Hyundai Sonata with an MSRP of $35,700. After rebates, trade-in, and down payment, I would be looking at financing $20,000 of that. I have a stable job at $50k/year, been with the company for 5 years. The only other bill outside of rent is a student loan for $285/month. I have 3 other auto loans on my credit report that were paid as agreed. But as I mentioned early, I did complete a chapter 7 bankruptcy recently.

I have purchased my last two vehicles from the same dealer, and they know I won't purchase a car unless I get a good deal. I thought about asking them to pull my credit and see what numbers they come up with.

Is it the N-Line package? I am considering picking one up later this summer, once some of my current debts are paid off.

Hyundai financing has some great promotional rates (currently top tier rates are 2.85@60, 3.05@72, and 4.05@84 and you would still qualify for all rebates), but I am not sure how lenient they are on approvals or how willing they are to work with people that have a recent BK. You might want to speak with the finance manager at your local dealer and see if he can provide any specific insight.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

jmcmillan — Mon, 29 Mar 2021 22:20:36 GMT

@Shooting-For-800 wrote:
Look at CapOne Navigator prequal.
SP.
Pick a car and put down $25,000
Sort by APR
That should give you some guidelines on best APR

I just prequalled at 3.1%
With Cap One, the better the deal, the better your rate.
GL!

This is a great starting point, thank you! I've heard Capital One will approve people with bankruptcies, I can use this to determine what rates I would be eligible for.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

jmcmillan — Mon, 29 Mar 2021 22:22:10 GMT

@Anonymous wrote:
Is it the N-Line package? I am considering picking one up later this summer, once some of my current debts are paid off.
Hyundai financing has some great promotional rates (currently top tier rates are 2.85@60, 3.05@72, and 4.05@84 and you would still qualify for all rebates), but I am not sure how lenient they are on approvals or how willing they are to work with people that have a recent BK. You might want to speak with the finance manager at your local dealer and see if he can provide any specific insight.

No, I'm looking at the Limited. I'm going to wait until April's rebates are announced to see if they increase.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

Loquat — Tue, 30 Mar 2021 01:37:18 GMT

@jmcmillan I think with the right Finance Manager you'll be fine. I think it's okay to look at CapOne as a guide but don't be afraid to look at credit unions either. PenFed is really good about working with their members with a few blemishes as it relates to auto loans.

I can't say this which, auto loans just aren't that hard to obtain even with less than perfect credit. With the right income, employment history, and a down payment if need be, a deal can be done.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

jmcmillan — Wed, 31 Mar 2021 13:21:22 GMT

@Loquat wrote:
@jmcmillan I think with the right Finance Manager you'll be fine. I think it's okay to look at CapOne as a guide but don't be afraid to look at credit unions either. PenFed is really good about working with their members with a few blemishes as it relates to auto loans.

I can't say this which, auto loans just aren't that hard to obtain even with less than perfect credit. With the right income, employment history, and a down payment if need be, a deal can be done.

That's good to know. Since I will only be financing about 60% of the car's value, maybe I will have a better chance. I will go to my dealership and see what they say. Capital One denied me, but they will only provide a reason via postal mail for some reason.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

Loquat — Wed, 31 Mar 2021 23:10:01 GMT

@jmcmillan Just know that what CapOne denies online is may not be the same result if you were to shop at a dealership. I know dealerships get a lot of hate here, and rightfully so most of the time, but they do have leverage when it comes to getting a deal hung. Most lenders care about their look-to-book ratio as it relates to the dealer and dealers can give it right back to them if they don't give back enough approvals.

There are rare occasions when it's okay to let the dealership do what they do...especially if you're starting to have a hard time getting things done on your own.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

jmcmillan — Thu, 01 Apr 2021 01:32:15 GMT

@Loquatthank you for that info. I'm definitely going to give my dealership a chance. They know when I show up, I will buy if the deal is good, and that I will also walk away if I'm not satisfied. So hopefully they can work their magic when I show up.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

rrscott426 — Thu, 01 Apr 2021 18:20:39 GMT

I think you have a chance depending on your total profile. My BK13 discharged March 12th, I purchased a brand new 60k car at 3.9% last weekend. Although Cap1 auto navigator initally approved me, I ended up getting financed through the dealer. I really think it helped to have a pre-qual from Cap1.

Re: Looking for bankruptcy-friendly auto lenders... is it possible to get a rate under 5%?

twosense — Sat, 08 May 2021 17:04:00 GMT

How did you negotiate the rate to 5% with the BK?