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Do I qualify for an auto loan?

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Do I qualify for an auto loan?

Hello!

I am currently looking to finance a car. I'm looking to finance betwen $6,000 and $7,000. I am looking at cars in the $7-8k price bracket with about $2,000 to put down.

 

I am a college student with a relatively short credit history. I have had one credit card account for a little over a year, and another credit card account for approximately 6 months. My TransUnion score is a 715 (currently) and my FICO score is a 695 (as of one month ago). I have never had a late payment and always spend less than my combined $1,600 limit. 

 

My income varies yearly, as I am a college student that works part-time. I make about $10,000/year at my part time job and recieve about $6,000 per year in refunds from my college scholarships and financial aid. 

 

I have no issue getting a cosigner for an auto loan and am totally open to it if it is necessary. My parents have already agreed to cosign if they need to. However, my parents do have a lower credit score than I do. Their credit is not necessarily bad, but they do have a longer credit history than I do.

 

I know that the length of my credit history and my income will be issues in this process. I was just wondering how I could go about it or if I should not even try...

4 REPLIES 4
Regular Contributor

Re: Do I qualify for an auto loan?

As many people here have stated, almost anyone can get financed for car because it is a secured loan. The only question will be what your terms are. You have good credit scores so you should definitely be able to get a car loan with an interest rate in the single digits. And, you're putting 25%+ as a down payment. Conventional wisdom says a credit union might be able to offer you the best terms. I think you're going to be just fine.

Message 2 of 5
Contributor

Re: Do I qualify for an auto loan?

For an auto, that's a very small loan... a lot of CU's will only give auto loans for vehicles up to a certain age... you may want to look into potential lenders and see what their terms are based on that. I think at that amount you may want to consider a personal loan. I personally would find a lender(local CU) and go into a physical branch (with parents) and explain your situation and ask them their opinion. There's a very good chance they have seen a situation like yours prior and will be able to offer good advice for it. Best of luck!

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Message 3 of 5
Community Leader
Valued Contributor

Re: Do I qualify for an auto loan?

Basically ANYONE can get a car loan. The trick is getting a rate you can live with. I think in your situation you’ll be totally fine. 2k down payment on a 7k car is fantastic. Your scores are good and you have over a year of history. I think you’ll be able to get a loan on your own just fine, but if the rates you’re seeing aren’t good enough, you can have your parents cosign. 

Good luck!

 

As an example, I once got a 10k car loan with a 5.49 rate without a cosigner. The income I listed was 17k. I also put 2k down

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Message 4 of 5
Valued Contributor

Re: Do I qualify for an auto loan?

I agree that anyone can get an auto loan, probably better to say anyone can get a terrible auto loan.  Shopping in the under 10k price range can be tricky because the cars are going to have some age and miles so be careful to select cars that are in good condition.  Having sold several cars in that price range I can tell you the sell very quickly in the private market,  I had 17 calls in the first 2 hours of my craiglist ad for an old BMW 3 Series.   First person who arrived bought it.

 

On the financing front I would suggest a credit union for sure.  I wouldn't worry about your parents credit much, just having another party that has a credit history on the loan should help, I doubt it would hurt.   All lenders will have maximum ages for financing used cars so that will be limiting.  I would go into a local credit union or call one of the many great ones out there and run your situation by them and they will have suggestions.  A personal loan might be an option also.

Message 5 of 5
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