Auto Loan Inquiry

[Anonymous]

Okay so I am getting ready to purchase my first car. I am 21 years old. I'm looking to put $5000 down and finance the rest as the car I'm looking at runs $20-$24k. I make on average $1350-$1500 a month. My credit score is 710. I only have about 2 years of active credit history never had any type of loans just credit cards. I currently do have balances on 3 of my 4 credit cards:

Chase Freedom $85 : $500 limit
Chase Slate $570 : $1000 limit
Barclay Apple $600 : $1000 limit
Kay Jewelers $180 : $1400 limit

I don't want to apply for an auto loan until I drop my utilization to about $400 out of my $3900 total credit limit, around 10%.

I want to know what are the odds of me getting approved for an auto loan of $20,000 for a 60 or 72 month loan term with $5000 down and if so around what apr's would I typically recieve. Im hoping for a monthly payment under $400 if possible.


I know I'll have better odds with credit unions than at Chase or other major banks! All the help and advice will be appreciated. Thanks in advanced

[Anonymous]

In how many months are you looking to buy? Drop your utilization. Join DCU and see if you can get a loan with them. They are amazing. What is ypur DTI or your other financial obligations due to income?

[Appleman]

Score of 710 looks good.

Income of $18,000 a year could be a challenge but never say impossible. 

Get that CC utilzation way down, your scores should go up. Many would say 1 card reporting between 1 and 9% utilization.

The $5,000 down payment is 20 - 25%, good. 

For example Hyundai has a first time buyer program. A few qualifications they list: (see bottom of post for more info)

At least $1000 down, check.

Minimum 6 months on job?

No previous secured loan (like an auto loan), check.

Up to 72 months, check.

Looks like payment can be 15% of gross (before taxes) income. $1500 X 0.15 = $225 payment.

Example: Your car $20,000 + dealer fee $299 (varies greatly) + Tax (this based on 8.5% sales tax) $1,700 = $21,999

$21,999 (total price) - $ 5,000 (down payment = $16,999 (amount to be financed)

$16,999 financed for 72 months at 0% interest (not likely) = $236.10 a month.

$16,999 financed for 72 months at 5% interest = $273.77 a month.

$16,999 financed for 72 months at 10% interest = $314.92 a month.

Don't forget about insurance, and at your age will be high. And please don't let it be a Mustang or you might really be looking at a huge insurance bill.

My car buying advice for you:

Do not go into the dealer unprepared. There are plenty of resources on the internet. Read, read, read and ask questions. Google 'car sales training videos' and watch some of them. Knowing the techniques that will be used to 'sell' you can help prevent over-paying.

Do not let the dealer run your credit as you are shopping. Some dealers will 'shotgun' your application (could get 5-10 inquiries as they shop for a loan).

Look for a less expensive car. If you find one for $17,000 (the price you negotiate) You could be paying $203.87 for 72 months (5% interest & $5,000 down).

Find an experienced car buyer to take with you (Dad, uncle, someone who understands the process).

Many here would say find a car for $5,000 and never have a payment ( I can't disagree). If you go this route pretend you have a payment and put that payment in a savings account each month. In a few years you will have a nice balance in your account.

Sorry for such a long post, I am just hoping that you can learn from the mistakes that many of us have made when buying cars.

If you have questions, ask away. Let us know how the process is going.

[Appleman]

And I do not work for Hyundai, just wanted to provide an example. What car are you looking at by the way?

If you can get an auto loan from DCU, good on you. They have some of the best rates I have seen.

[Anonymous]

I'm looking to purchase around August - September. My total debt is $1340. My take home income is $1350 - $1500 just depends on how many hours and how much overtime I put in. I've been employed at my current job for a year and two months, pharmacist technician.

I'm looking at a 2012 - 2013 Infiniti G37 coupe. I found one that fits all my requirements and has really low mileage for a 2013 so that's a plus they're asking $24,900. But I think i can bring them down a bit I just want to know if I'd even be elligible for a 20,000 loan with my credit score and income! I'll definitely check out dcu

[Anonymous]

I'm looking to pay off all credit cards by late April!

[Anonymous]

Insurance wise full coverage through AAA is $1,200 for the whole year which I already have saved two years of insurance cost. I've been planning on purchasing this car quite some time so I'm pretty prepared for insurance (having save up specifically to fund two years worth of policy) and the $5000 down. I'm just looking to lower credit card debt and get my score higher! Also the 720 FICO score I provided is what I recieve through my Chase Slate account. How accurate is that?

[Anonymous]

At 46k yearly dcu approved me for a 33k loan. Different lenders will vary, but I dunno about the odda of getting 20k. Definitely not impossible but if there's anyway you can work more at the time of app so your paychecks look a little fatter, do it.
My girlfriend was approved for 11k making 1k a month, which the cu originally only approved 10k and then they raised it on review. So your somewhere between the two obviously, it's just very close.

Your accuracy of your Fico through slate is a tough question to answer. For Fico8 purposes. It's spot on. But there are other fico versions. For equifax there is Fico 5 , bankcard5 and 8, auto enhanced 5 and 8, and many more. Same for the other bureaus. Impossible to really know without pulling your scores(which I don't recommend since your nowhere near apping) most lenders will pull a specific score version, so you can cater your score towards that one. In some cases, like auto enhanced your not going to be as high because of lack of installment loan.

[Anonymous]

Generally, unless your file is thin(which knowing your average age of accounts, and length of credit history) apr is set In a tier function, credit score of 650 5% 670 3% etc etc(not actual respective numbers) DCU is a great lender that anyone can get approved for with a small donation of $10. If your equifax Fico 5 is 675 or higher you would get a rate of 3.25(2.74 with direct deposit)
With a 2.74 and 20k loan your monthly is 330 over 65 months. If I was in your shoes, that's my target. Of you get super curious you can find your Fico5 score at this site, basically pay $20 for anything that says equifax and says it has your Fico scores. It'll give you a much better idea of where you stand. Banks are for profit, most, if not all credit unions aren't and give better rates. Dcu and penfed are among the best and can't be beat really, unless by a captive lenders special financing, which to be honest I think your far and away from(mainly because I don't PERSONALLY, see many for used cars, but I could be totally wrong on that last statement, so if I am, someone please correct me). Your in solid shape. I just wish your income was higher. Obviously you can save, which is great, again, when you do app for your loan, make sure the paycheck leading up to it has as many hours as possible.

[Appleman]

Kuma,

On the Equifax FICO 5 for DCU is that Auto or Bankcard? At least I believe there is an Auto5 and Bankcard5 for Equfax.

Thanks