Auto Loan with high DTI

[Anonymous]

Me and my wife just finished a long cusotdy for my step son and endded up with a huge amount of debt.  We used CC's to pay for our attorney but the interest rates on the two card are 4.5 and 6 percent.  Our current DTI is around 32%.  Credit scores are: EX: 710, EQ: 680, TU: 686...We have a significant amount of savings around 100K(but in our investments)........What are the chances of us getting a loan for around 15K for a car?

[Anonymous]

First, if you can hold off, try to pay down the CC debt prior to the car loan.  Give yourself a few months of putting the car payment towards your debt to lower your DTI and get that debt caught up.  It may not be high interest like some cards, but the minute you miss a payment or one get misplaced or reported late that 6% will soon be 25%.  Also, cards are not allowing people to carry large balances like they used to.  I would ideally try to keep all cc debt at a level I can pay off in less than 6 months (most people here would say 2-3).  Maybe pulling money out of the investments now for the car is not a bad idea and then try to get the CC debt paid down.  Then once you get the C paid down, you can double down the amount you would be paying on the car and the amount you would be paying on cc's to rebuild the investment portfolio. (I would only recommend this if you are not nearing retirement age though)

The best bet would be to wait on the car until the cc debt and DTi comes down some.  That said, with the assets you have and the credit scores, you should be able to get a loan at your local credit union.  One other thing to consider is getting a personal loan that you could pay off the CC and get the car.  That would depend on your idea of "huge" debt though. I don;t see them doing a 50K loan...But if you have 10K in cc debt and the car you may (with the right income, etc) be abel to get liek 25K to do it all if you have a goo d realtionship with your local CU or lender.  Not sure, but worth a try.

[MattH]

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@Anonymous wrote:
Me and my wife just finished a long cusotdy for my step son and endded up with a huge amount of debt.  We used CC's to pay for our attorney but the interest rates on the two card are 4.5 and 6 percent.  Our current DTI is around 32%.  Credit scores are: EX: 710, EQ: 680, TU: 686...We have a significant amount of savings around 100K(but in our investments)........What are the chances of us getting a loan for around 15K for a car?

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I would suggest you postpone spending that kind of money any time soon in your situation.  You want to get that debt paid down as quickly as possible, especially now when credit card companies are raising rates and tightening limits left and right even on people with low debt and 800-plus FICO scores.  If you cannot do without buying SOME kind of car for a while then I would suggest getting something well below the $10K price range, you can get quite a few used cars for less than $10K.

[Anonymous]

Thanks for the advice....We have to get a car because my wife will work soon when we move in the Summer and my schedule will not allow us to car pool.  Her income as a school teacher will put our DTI under 30%.  The CC debt is gradually going down and will be significantly lower in a few months when I apply for the loan.  I will put down 20% - 30 % and to get my payments around 275.00 or so for 4 years.  I hate having this debt and the ironic thing before the custody battle I hardly ever used my CC's.  Thanks again for the advice.....