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Advice: Am I delusional? 50k loan?

Member

Advice: Am I delusional? 50k loan?

Hey all, been perusing this site for a few months as a lurker. Really impressed with the wealth of knowledge here! With that being said, I’d like to get back in a real vehicle after being out of the game since 2013. Here’s my abbreviated credit history. Hold on tight.

 

Credit Score: EX Auto 650 / TU Auto 656 / EQ Auto 648

 

AAoA: 1 year

 

# of positive trade lines: 3 (3 recently opened Credit Cards within the past year with $5k available credit)

 

# of negative trade lines: 1 (small collections from 2012 - total $450), Repossessions, see below

 

Income: $95k+

 

Length of Employment: 2 years

 

Previous Loan Experience:
- 09 911 Turbo ($167k Repossessed 2013) – Scheduled to fall off report 10/2018
- 08 Audi S6 (Repossessed 2013) - Scheduled to fall off report 10/2019

- Various other Porsche 911’s, Audi’s Paid with no derogatory info, but some are beginning to age-off

- Mortgage / 2nd Mortgage: $750k 2013 foreclosure – these items just fell off all of my reports on 6/01/18

- Home Equity Line: $200k, Closed, Paid

 

(DTI):  1% - no credit card debt

Monthly rent: $1200

 

Down payment amount: 10-15%

 

As you can see, 2013 was a stellar year! Smiley LOL

 

I started rebuilding credit 1 year ago and I’m enthused about the result so far since i started at a cringe-worthy 460. I anticipate being closer to 675-700 by this fall.  Currently I have very little monthly bills primarily a rental payment of $1200.

 

My primary questions are…

 

  • Am I optimistically ludicrous to think I could qualify for a $50k auto loan given my high-value repos and lack of recent auto loans?
  • Where’s my best odds of approval assuming that I’ll be in the 675-700 score range when I start applying?
  • Other than paying bills on time, is there anything I should be doing now that would increase my odds in preparation for applying for an auto loan in 3-4 months? Open new lines? Larger down payment? Charge everything on Credit Cards, pay in full every month?

 

I’ve perused this forum extensively, and have seen similar scores getting approved, however I’m thinking my lack of recent recent credit lines is a deal breaker regardless of score?

 

Thanks in advance – much appreciated!

Message 1 of 14
13 REPLIES
Valued Contributor

Re: Advice: Am I delusional? 50k loan?

You sure do have expensive taste in cars...after 3 repos, are you sure you want to do this again, even if you can? If you can get the loan, your interest rate will probably be very high.





TU fico08=810 08/29/18
EX fico08=796 09/05/18
EQ fico08=811 09/05/18
EX fico09=797 08/01/18
EQ fico bankcard08=827 08/28/18
Garden since 07/02/18
Message 2 of 14
Member

Re: Advice: Am I delusional? 50k loan?

Ha. Absolutely!  No regrets whatsoever. Things change over time and comparing a $50k loan to a $167k repo isn't quite apples to oranges with regards to 'feasibility'. I don't see any risk of repeating the past as this payment (if approved) is extremely managable.  Repos were not a result of irresponsibility, (i know that sounds funny), but more of an instant change in income and lifestyle change. Saying "are you sure want to do this again" isn't quite the same for various reasons and a bit presumptious not knowing the situation. but hey, thanks!


@sarge12 wrote:

You sure do have expensive taste in cars...after 3 repos, are you sure you want to do this again, even if you can? If you can get the loan, your interest rate will probably be very high.


 

Message 3 of 14
Established Contributor

Re: Advice: Am I delusional? 50k loan?


@bobabooey wrote:

Ha. Absolutely!  No regrets whatsoever. Things change over time and comparing a $50k loan to a $167k repo isn't quite apples to oranges with regards to 'feasibility'. I don't see any risk of repeating the past as this payment (if approved) is extremely managable.  Repos were not a result of irresponsibility, (i know that sounds funny), but more of an instant change in income and lifestyle change. Saying "are you sure want to do this again" isn't quite the same for various reasons and a bit presumptious not knowing the situation. but hey, thanks!


@sarge12 wrote:

You sure do have expensive taste in cars...after 3 repos, are you sure you want to do this again, even if you can? If you can get the loan, your interest rate will probably be very high.


 


50k might not be 150k, but it is still a "luxury" purchase that will equal half a years salary. With your scores and history there will likely be a high interest rate too.  The payments might be manageable, but what if there is another employment or lifestyle change?

 

Nothing is the same, but everything is part of a pattern.  I would recommend, if you need a new vehicle, something cheaper, to help build your credit, and save the extra monthly payments for an emergency fund, or larger down payment on your choice vehicle in a year or two.

Message 4 of 14
Member

Re: Advice: Am I delusional? 50k loan?

Theoretically, a $50k loan would be 30% of my actual annual income and I have no monthly debt. But i hear what you are saying since i did post "$95k" as my unnofficial official income. 

 

Since the full scope of my situation is not stated, understably, I'll go easy. There is no pattern, and very little chance of another 'employment or lifestyle change' of the same magnitude of what I experienced. Beleive it or not, my situation was completely, 100% voluntary. I purposely folded a lucrative business, voluntarily surrendered indulgent toys, and moved to the mountains to embark on a healthly lifestyle. Fully knowing the repurcussions, it was an easy decision and a fun ride. Some may say "irresponsible", I say the experience was/is enlightening and liberating.


With that being said, my post was to seek advice on how to achive my goal of securing a reasonable-ish $50k loan in the near future since my score will soon be approaching 700 and repo's will be falling off my report. Assuming those data points, any recommendations on lenders that are more liberal? thanks! 

Message 5 of 14
Valued Contributor

Re: Advice: Am I delusional? 50k loan?


@bobabooey wrote:

Theoretically, a $50k loan would be 30% of my actual annual income and I have no monthly debt. But i hear what you are saying since i did post "$95k" as my unnofficial official income. 

 

Since the full scope of my situation is not stated, understably, I'll go easy. There is no pattern, and very little chance of another 'employment or lifestyle change' of the same magnitude of what I experienced. Beleive it or not, my situation was completely, 100% voluntary. I purposely folded a lucrative business, voluntarily surrendered indulgent toys, and moved to the mountains to embark on a healthly lifestyle. Fully knowing the repurcussions, it was an easy decision and a fun ride. Some may say "irresponsible", I say the experience was/is enlightening and liberating.


With that being said, my post was to seek advice on how to achive my goal of securing a reasonable-ish $50k loan in the near future since my score will soon be approaching 700 and repo's will be falling off my report. Assuming those data points, any recommendations on lenders that are more liberal? thanks! 

Ok then, I'll give you an answer to your two questions:

 

1. Yes, you are delusional.

 

2. You should be able to find a bank who will indulge you and loan you the money. You may not get great rates, but they'll indulge you all the same. You might even possibly have to explain to a lender that your intentional repos were not intentional and that your past irresponsibility was not irresponsible.

 

 

Message 6 of 14
Member

Re: Advice: Am I delusional? 50k loan?

Thanks for the snarky input. 

 

1. So, with a credit score that is about to be 700 in a few months, you're saying that a $50k loan is in fact 'delusional'? Please explain. 

 

2. Thanks for the snarky response, but why would i need to explain the repos if they won't be on my reports any longer? And yes, my repos were indeed voluntary.

 

Thank you for your time though, next time when attempting to draft a snarky response you may want to consider your own introspective delusion. 

Message 7 of 14
Established Contributor

Re: Advice: Am I delusional? 50k loan?

If you wait until all repos age off of your report, keep your DTI that low, and have a proveable $95K income, you should be able to relatively easily find a bank that will induldge you.

 

 The "But..." is will you have any positive installment loan history still reporting by the time the bad stuff falls off?  Without a postive auto loan or mortgage history,  your interest rate is likely to be higher than it otherwise would be.  You might to welll to take out an secured personal loan at a credit union if that's the case... It could mean an even higher bump in your credit score ones the bad stuff falls off.  It doesn't have to be big...  $500 or $1000 would be plenty.

Venture: $18K | Amex ED: $18K | Amex BCE: $15K | NFCU CR: $15K | IT #1: $14.5K | Wells Fargo: $11K | Savor: 10K | Cap1 QS: $8.5K | Barclays Rewards: $7.75K | IT #2: $6.8K | MLife: $6.5K | Sportsman's Guide: $5.9K | NRA: $5.5K | Elan Plat: $2.3K | Cap1 PS: 2K | TRV: $2.5K | Cabela's: $1K


 


Current FICO 8 Scores: EQ: 728 | TU: 736 | EX: 726


Message 8 of 14
Valued Contributor

Re: Advice: Am I delusional? 50k loan?


@bobabooey wrote:

Thanks for the snarky input. 

 

1. So, with a credit score that is about to be 700 in a few months, you're saying that a $50k loan is in fact 'delusional'? Please explain. 

 

2. Thanks for the snarky response, but why would i need to explain the repos if they won't be on my reports any longer? And yes, my repos were indeed voluntary.

 

Thank you for your time though, next time when attempting to draft a snarky response you may want to consider your own introspective delusion. 


Alriight then, I'll go through this.

 

Taking an auto loan for 30% (50% if you're reporting 95k) of one's annual gross is irresponsible. Do people do it all the time? Sadly, yes. Does that suddenly make it reasonable? Not at all. Most people who take such loans don't take 3 year loans or 4 year loans. They tend to take the 72/84 month ones, so that also means you're obligated to that 30-50% for the next 6-7 years. You have no idea if your financial situation will be the same, better, or worse over that period of time. If your rent situation changes (or you get a mortgage), your monthly expense there may go up significantly. Do you have room for that? Are you saving 20% of gross, and how will that be impacted by such a large expense?

 

For depreciating assets such as cars, the recommendation is to pay cash and not finance at all - you're then hedged against the risk of future changes. Alternatively, going with a smaller loan (say 10-20% of gross) is a safer play as it still leaves you more buffer should things go south.

 

For lower income earners, borrowing 30% of gross is all they can do to find a car, but we're also talking about people making $30k borrowing $10k for a used car, not a $50k one.

 

Your last repo doesn't fall off for just over a year. Unless you're posting today about taking a loan out in late 2019 or 2020, there's going to be at least one repo on your report. Some banks will shrug it off since it's 5-6 years ago, but some will want to understand a little more about it. Your scores are in the borderlands, so I wouldn't be too surprised if they ask.

 

You voluntarily walked away from financial obligations and told yourself it wasn't irresponsible; it was enlightening. You have convinced yourself you will never make the same mistakes (though you may not even be convinced they were mistakes) you made in the past while simultaneously engaging in similar behavior in the present. You want to borrow close to 50% of your reported income, and assume it's reasonable. That's all pretty delusional thinking.

Message 9 of 14
Member

Re: Advice: Am I delusional? 50k loan?

Thanks. That's good info. I hadn't thought about the secured approach - i'll look into it. thanks. 

Message 10 of 14