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Is it even possible to get a loan rate below 10% with this scenario?

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Is it even possible to get a loan rate below 10% with this scenario?

Okay, still waiting on my discharge (any day now) but I got my actual FICO scores from TU and EQ, none from EX because there is not enough data. They are way lower than I thought, about 100 points lower than the Credit Karma FAKOs.  How much can down payment overcome low scores?

 

FICO Scrores: TU 512 EQ 533

Car price: 48K

Down Payment: 21K

Debt to income ratio < 10%

 

When you think about it, the risk is insanely low as with a 5 year loan, it would never be anywhere near upside down, but how do creditors view the risk?

Message 1 of 14
13 REPLIES 13
Valued Contributor

Re: Is it even possible to get a loan rate below 10% with this scenario?

Might be doable with that down payment but the interest rate would likely be in the teens

Ch 7 Discharge 3/12/2018
Cap One QS1 $3,500, Wayfair $5,000, Blaze MC $3,000, Kohls $1,000
Infiniti Financial lease

Message 2 of 14
Regular Contributor

Re: Is it even possible to get a loan rate below 10% with this scenario?


@TexasBKSurvivor wrote:

Okay, still waiting on my discharge (any day now) but I got my actual FICO scores from TU and EQ, none from EX because there is not enough data.  How much can down payment overcome low scores?

 

FICO Scrores: TU 512 EQ 533

Car price: 48K

Down Payment: 21K

Debt to income ratio < 10%

 

When you think about it, the risk is insanely low as with a 5 year loan, it would never be anywhere near upside down, but how do creditors view the risk?


With scores like that, it won't matter what the down payment is. You'll pay OTA for interest. My honest opinion.....forget the $48k car and buy a $20k car with cash, no payment. Unless you need the auto loan to report, in which case you could still buy a much cheaper car and save yourself thousands.  Any lender is going to see you as extremely risky and you'll pay for it in interest charges. 

 

Having a BK that's processing and not even DC'd yet, having $21k cash, wanting a $48k car....begs a few questions here tho. 





Message 3 of 14

Re: Is it even possible to get a loan rate below 10% with this scenario?

It's a chapter 13, and my last payment after 60 months was in October of last year so that very large chunk of money has been put back since then. plus I totalled my last car in November, so there was payoff from that.  Either way, my finances are not a problem.  I won't even notice the car payment compared to the $1150/mo I have been paying to rent a car while waiting for discharge.  But the credit is a problem...  If less than 10% isn't going to happen I suppose I will do something else.

Message 4 of 14
Regular Contributor

Re: Is it even possible to get a loan rate below 10% with this scenario?


@TexasBKSurvivor wrote:

It's a chapter 13, and my last payment after 60 months was in October of last year so that very large chunk of money has been put back since then. plus I totalled my last car in November, so there was payoff from that.  Either way, my finances are not a problem.  I won't even notice the car payment compared to the $1150/mo I have been paying to rent a car while waiting for discharge.  But the credit is a problem...  If less than 10% isn't going to happen I suppose I will do something else.


Gotcha, makes sense now.  

 

And you can certainly try for 10% or below, but unless you have a banker that your dad plays golf with....unfortunately, it just may not happen.

 

Hell, you could save that $1150 for another year and save yourself thousands, while letting your score improve in the meantime. 





Message 5 of 14

Re: Is it even possible to get a loan rate below 10% with this scenario?

That $1150 isn't what my bk payment was, (I wish it were that low), it is what I am paying right now to rent a car while I wait for my discharge since my car was totalled.  Kind of ridiculous, but not too many other options until the discharge is granted, and they seem to be dragging their feet.

Message 6 of 14
Regular Contributor

Re: Is it even possible to get a loan rate below 10% with this scenario?


@TexasBKSurvivor wrote:

That $1150 isn't what my bk payment was, (I wish it were that low), it is what I am paying right now to rent a car while I wait for my discharge since my car was totalled.  Kind of ridiculous, but not too many other options until the discharge is granted, and they seem to be dragging their feet.


Geez, I'm having reading comprehension issues today, my apologies. Are you totally against buying a car for cash? $1150 a month to rent one seems UBER CRAZY.  





Message 7 of 14
Regular Contributor

Re: Is it even possible to get a loan rate below 10% with this scenario?

I'm not trying to change your mind or trying to tell you how to spend your money, but if you have $21K, wouldn't you be better off buying a used car (heck, you can even get some new cars for that price)? I can only imagine what your monthly payments would be on a $48K car with your scores. Just my personal opinion, but it's DEFINITELY not worth it.

EQ - 727
TU - 752
EX - 774
Message 8 of 14

Re: Is it even possible to get a loan rate below 10% with this scenario?

Well, technically  I have double that, and can pay cash for one car if needed. I am actually looking to buy 2 cars with this scenario. 1 to replace the car that was totalled, and one to replace our other car that has 170k miles on it at this point.  Worst case, I buy one to replace the totalled car with cash and drive the 170k car for a bit longer.  No matter what, the payments are not an issue, but I am not willing to pay over 10% interest just as a personal thing. I am sure after a few months the scores would be higher, though I would have less of a down payment if I pay cash for the first car.  

Message 9 of 14
Epic Contributor

Re: Is it even possible to get a loan rate below 10% with this scenario?

What kind of cars do you want to buy?

certain makers tend to not be to difficult and im kind of shocked that your credit scores are that low but i wouldn't be surprised if your auto enhance fico's are much higher especially if any of the cars were in the bk originally because they would have gotten paid out fully.

Message 10 of 14
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