First Time Auto Loan

[Anonymous]

First time auto loan

Happy Sunday everyone!

I’m currently in the process of car shopping for my first auto loan.  I’m looking to purchase a used Audi A5 (2009-2011). I live in the Northern Virginia/Baltimore Maryland area. If I could qualify for a lease on a 2014 Audi A5 that would be grand, but I’m assuming at this point, that’s just hopeful wishing.

I recently applied to road loans and was approved. However, only approved for a loan of 18K with a down payment of 2400 with a max allowed down payment of 420/month with an interest rate at 24%. I called to request a loan increase to 28K and was told no. I know 24% is extremely high, but I would have taken it for a year and refinanced.

My score at the moment is 590. However, around the 7th day of may Two new lines of credit will hit that will provide me with a 25K credit limit with both at 0 balances.

Age: 24

Income: 70,000 (Human Resources Consultant)

Years of employment: 8.5 years within the same industry.

Rent: 1545.00

• One Private Student loan from Wells Fargo (Currently in forbearance as I’m taking classes part time. Thinking about contacting Wells Fargo to have the forbearance lifted as I was paying 218 a month from November- February, as I started back up in then) Loan Balance is 18,184.00
• One Student Loan that was funded through the Department of Education by Great Lakes Higher Education Corporation. Currently in forbearance as of Feb 2014. Loan Balance is 4,750.00
• One Small Personal loan for 7500 with three late payments (Was laid off for a short period of time in October when I was with a government contractor) Just started working a few weeks ago.
• Two New lines of credit that will provide me with 25K available credit and 0 balance.

What banks will finance me with a score around 650-680 once the two lines hit? I’ve been looking at PenFed, DCU, CarMax, Eastern Motors, Road loans (IF I can re-apply for about 28-30K), Any other banks/auto lenders that can be recommend?

[Remember0]

1) Please don't italicize the whole post. Makes it pretty much impossible to read. In fact go back, edit that post, and unitalize it.

2) What is the minimum monthly aggregate payments for all student loans, excluding the one in forebearance?

3) Monthly payment on personal loan?

Also why do you think your fico will jump 50+ points with the two cards? Do you not have any credit cards currently?

Personally, I'd stay away from penfed. They are very conservative and your profile probably isn't strong enough imo. Roadloans will probably continue to give you higher apr. Also I doubt if you'd get 28k from DCU.

With a 650+ I'd try something like BofA. I think a dealer can get you financed, but if you go in with no approval of your own, it'll be a very high APR (not as high as 24% though probably).

[Anonymous]

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@Remember0 wrote:

1) Please don't italicize the whole post. Makes it pretty much impossible to read. In fact go back, edit that post, and unitalize it.

2) What is the minimum monthly aggregate payments for all student loans, excluding the one in forebearance?

3) Monthly payment on personal loan?

Also why do you think your fico will jump 50+ points with the two cards? Do you not have any credit cards currently?

Personally, I'd stay away from penfed. They are very conservative and your profile probably isn't strong enough imo. Roadloans will probably continue to give you higher apr. Also I doubt if you'd get 28k from DCU.

With a 650+ I'd try something like BofA. I think a dealer can get you financed, but if you go in with no approval of your own, it'll be a very high APR (not as high as 24% though probably).

Remember0- Thanks for the recomendation, I went back and edited the message. Both student loans are in forberance, one is from wells fargo. Do you think I would get qualiifed through wells fargo since I already have a relationship with them cause of the student loan? The personal loan is 250/month. I don't have any credit cards on file so I figured with a nice limit and available amount of credit it would go up rather high. Should I just give up on the process since you believe DCU won't qualify me, nor will pen fed? Do autolenders base their decision with underwriting or is it based soley on score and are the auto lenders through dealerships more leniant?

[Remember0]

Awesome! So that makes sense. I'd definitely wait till those cards report. I'm expecting you'd get a good bump. It may take a few months to fully maximize, but I think you'll gt an initial bump. I'm not sure how you qualified for 25k in lines with that kind of fico. Are you sure you have a <600 FICO? The credit card companies should have sent you something with your score on it and the bureau they pulled from.

Also for future reference, you maximize FICO by having all cards except one report a 0 balance. That one other card should report a balance less than 10% of its cl. By the way, you should use both cards at least once per 3 months to avoid cancellation due to inactivity. If you use a card and want it to show 0 balance, pay it off a few days BEFORE your statement cuts so the statement shows $x in new charges and the same amount in payments. THat way your statement will show a 0 balance (you paid off all charges BEFORE the statement) and 0 will report to the bureaus.

If your score went to 650-680, you would qualify for DCU. Just not for 28k I think.

You should not give up, just a matter of finding the right lender. Auto loans do underwriting, but score is a bigger part than say for mortgages. It's easier with dealers because they do more volume plus work with literally dozens of lenders. So yeah, approval and getting higher loans in terms of money borrowed are easier through a dealer. In fact if you waited for those cards to show up, and went to the dealer, I'm almost sure they would get you approved. That said, if you went in without a outside approval, they can gouge you (aka add to the interest rate a lender really approved you for and collect the profit).

If you get to 650+, I think BofA is worth a try to be honest. I know of another person who applied with like a 680 and got 5%. Also their approval amounts and DTI tends be be nice in my opinion. Don't apply to wells on your own. The Wells you can apply to is VERY strict with auto loans and they don't care about the relationship. The Wells that a dealer applies to is much more forgiving, though the prior good experience doesn't count if I remember right.