I keep getting denied, is it possible to get an auto loan?

[Anonymous]

I'm a 20 year old college student living at home with a part time job. I make roughly $1500 a month. I do not have a car right now but desperately need one to go to work and commute daily to school. I've applied with several places including a couple credit unions, and I keep getting denied.

my credit is fairly new, I just got a credit card a month ago and my score is around 640. I've only been at my job 3 months as well. I also am trying to finance a car older than 10 years old. And to make things worse, I do not have anyone to cosign. 

I see people online saying that "anyone can get a loan" but I'm finding that hard to believe right now! Seems like no matter where I turn, I don't meet some criteria. I just need a small loan ($4,000) so I can have a running car to get around! 

any help is appreciated, I'm not sure where to go from here

[Anonymous]

Where are you getting your score from? Do you have any loans already, like student loans?

It takes 6 months of credit history to generate FICO scores; that which lenders use. With only 1 month of history, which may not even be reported yet, you won't qualify for many credit products.

[Anonymous]

I have a discover card so that's the score that they gave me the last time I checked. 

I do have student loans but could that really be what's causing an issue? I don't know a single other student without student loans and yet I also know a couple who have financed a car. 

[Brian_Earl_Spilner]

Student loans build credit history, that's why it was asked.

You're probably being denied because of the age of the car. The loan to value is probably not where anyone wants it.

If you go to a dealer, they have programs for first time buyers. Unfortunately, you'll need to spend more than you want. My first car was a Honda for $10k with no credit history. I had to put  $2000 down, but no co-signer. Payments were $205 for 60 months.

[Anonymous]

DTI is affected by your student loans in many calculations.

You *only* have 1 revolver (card) with 1 month of history.

You actually gain less points from 1 card than you do 3.

Depending on what balance your Discover card is reporting, that could also suppress your score.

old car + thin credit + low income + high debt = riskier

[Anonymous]

It would be good to buy a junker- something $1000- 2000 in cash. Doesn't matter if it's ugly. Doesn't matter if it isn't great. Just as long as it's safe and runs.

Drive that until you have a year or two of credit and job history. Then, try again if you really must to finance a $5 to $10k car. You don't want to break $200/mo in car payments considering you'll also be paying a decent amount in insurance and other bills.

While driving the junker you need to sort out the habits of changing your oil, checking your tires, making sure it's safe and won't die on the side of the road. This experience will pay off when you do buy a better car.

[Mv350]

try to prequalify with the auto loan navigator with capital one. I'm guessing you could get an offer from them. After a year refinance the car for a lower rate. 10 years is usually the MAX age for used cars. So you might end up with a larger loan like Mr. Spilner mentioned. Larger loan, Newer car, but actually financed. 7-10k for between 48-60 months 

7,500 @Anonymous.99%  60 months would be about 150 bucks a month w/ 1k down

10k @ 15.99% 60 months would be about 220 a month w/ 1k down

Lenders would usually like to keep you under 30% debt to income ratio per month, so if you don't have to pay rent, you should be golden. 

With limited history you should not have to pay more than 15.99% although I've known people with terrible history pay 26% and up. So anything above that I would try to avoid. If you could join a credit union near by, or DCU or Navy Federal. They might help with first time buyer financing. No history is better than bad history. 

https://www.dcu.org/ this is all online, and would give you a rate discount if you direct deposited your paycheck into their credit union. 

https://www.navyfederal.org/ this has limited membership to military and their family members, but it does not hurt to try. 

[Dj4Money]

 I concur with trying Capital One Autonavigator. 

That said, all the Big Three (Ford, GM, FCA) have first time buyer programs. It helps to be pre-qualifed so you don't get socked with a high interest loan that is to their advantage and not yours.

 Used cars will get you a higher rates and lower loan allowances. 

 In this crisis (as with most of the last decade) it's best to buy new. There is talk in Washington of an Auto bailout, I'd keep track of that as well, there might be some incentives directly to citizens to get you to buy.

 You can get low rates on CPO/Certified Pre Owned which are the best used car option. All have a bumper to bumper warranty of at least a year and almost all of them extend powertrain warranties out to 5 years or 100,000 miles.

 If I was in your shoes -

 Have at least $1,500 available in cash or credit for down payment. If Capital One approves you they will tell you what your min down payment will be, typically around $1,000

 Try Capital One Auto Navigator and CarMax to get an idea where you are.