Need help

[Anonymous]

Hello I need help because I want to buy a new car. That car is priced at 19k and i am planning to put at least 6k for the down payment. My only worry is that I make aroun $1,200 a month, but my rent is only $125. I have been employed at my job for about 5 months and I am 19 years old. My question is whether I will have people accept me for a car loan and if so what do you think my interest rates will be? My credit scores are 690 and 694 for exquifax and experian and 716 for transition. I am sold on getting a new car and I really want to I just want to be prepared for what comes ahead. Your advice and opinions are greatly appreciated!!! 

[Remember0]

1) What are the aggregate minimum monthly payments across all your credit cards (even if you pay off monthly, what's the statement's minimum payments)?

-Your rent seems fantastically (almost unbelievably) low. What's the story there and do you have a signed lease (term 6+ months) for that amount?

Assuming the answer to # 1 isn't very high (like say >100) and you have a good rent story, your DTI is fine here. BUT that gross income is a little low. I think Santander Consumer USA (and it's affiliates drive and roadloans) have a 1.2k gross minimum. Is 1.2k your pre-tax gross income? If so, that'll pretty much get rid of all prime lenders. Prime lenders really look for a 1500+ gross...anything you happen to leave out of that 1.2k...maybe gifts from parents, stipends, grants/scholarships (all these forms of income are dicey when it comes to providing proof if asked, but it's better than not having anything I suppose).

[Anonymous]

My minimum payments for my credit cards are 0
0
And 20
I only owe 380 on a card that has a limit of $1700 and that was a special financing deal for a Mac. I still have a year to pay that off.
I also receive scholarships would I be able to count that as income? I receive $4500 every three months so that raises my income.

[Remember0]

Are you taxed on that 4.5k? In other words do you have to report and pay taxes on it? If you have in the past and your prior 1040 has 1.2k/month+the scholarship reported and taxed, it's not a problem. Often it comes down to use. Do you get that 4.5k in your bank account or does the school "keep" it directly?

But if it's not taxable (most likely the situation) and it doesn't come to your bank account, it's a little trickier if a lender asks for income verification. Some lenders won't include it if they ask for verification. Still your chances of approval at a dealership are far higher with a greater than 1.5k income than a less than 1.5k income.

Also even if a lender approves, please make sure you'll be able to afford the car payment. Even on a 13k loan, payment can be 300/month depending on term and any extras you buy (gap, warranty...I never buy these from the dealer but many people do). You need to add maintainence, registration/yearly reg taxes, fuel, and inurance (high at your age) to that. That could be well over half your 1.2k salaried income per month.

Also your rent: what's the story behind it? A lender will want to know why it's so low to be honest.

[Anonymous]

Okay well my rent is that I share a room with my buddy and we pay for the room and I have lived there for over a year and a half and yes the financial aid is taxable because I got the form for it and it goes directly to my bank account. Also toyota gives the first two years of maintainer included so that will take care of maintainer and I will be graduating in two years to get a job that will pay a lot more and I am in a scholarship program that will help me get a job after college. I was just hoping to do this loan by myself and get at least under a 10% rate if not lower a 6 would be ideal.

[Anonymous]

Thank you for all your advice it is really helping!

[Remember0]

Okay, good story on the rent. That's fine. They might ask for proof your roommate has been paying his half (either to you or the landlord) or that you only pay 125, but I doubt it. Your story is fine.

Okay so it does go to your bank account. Should have mentioned that lol. Definitely include that as your annual income. If verification comes up, tell them you earn the 4500/3 months (obviously make it a monthly figure on your app) as a stipend and that it directly goes to your bank account for you. Offer up a year's worth of bank statements if they want. I predict no issues here.

I'd say you'll be approved by yourself with that kind of fico. Maybe try a local bank/CU/DCU. It's only 1 inq. But don't be dishartened if they reject when they ask about income breakdown. Local banks/CUs tend to be a little shier about stipends. I'm sure a captive/dealer will get this through. Just make sure you can afford the car and everything that comes with it (parking too if you're in a city like I am) for the enxt two years before you get a higher-paying job! And check out college grad discounts, though you may not qualify as you still have 2 years left.

If your APR with a 680+ FICO is over 5%, come back here. There's something wrong...most likely the dealer is scre*ing you. Out of curiosity, what does your utilization (as a percentage) look like and when was the oldest account on your credit opened? Also any baddies?

[Anonymous]

Okay sorry about that lol but thanks I really appreciate the help! And I don't know if it helps but I consigned with my friend for a car and basically he refinanced and I didn't cosign with him so basically it shows I have a paid car on my credit. And I have never had a late payment so no baddies and the longest credit card I have open is for a little over a year. It is a year and 4 months. As far as utilization I don't know what that it?

[Remember0]

No need to be sorry, bud! I'm just glad I asked.

And yeah, that helps a lot. In fact if that was showing as open right now, I'd say it'd be harder for you to get approval. But having it show as paid with no baddies is the best case scenario. So I'll say if a toyota dealer gives you more than 4% (really 3%), come back here. For the future, be very careful cosigning aka don't do it (for auto loans, credit cards, mortgages, whatever). It's often not that rosy...there's a reason the bank wants someone to cosign...and I've seen some horror stories and usually more horror stories than stories like yours where you actually wound up benefiting.

Your length of accounts is fine too imo. Just don't open anything new before you get a car so your average age of accounts doesn't decrease.

Utilization = (Total of all credit card balances that show on your monthly statement even if paid in full monthly) / (Total of all credit card limits, excluding AMEX NPSL cards)

Out of curiosity, you looking at a 2014 Corolla?

[Anonymous]

Yes at the 2014 corolla Eco plus! And let's see this upcoming balance ima have -129 on one of my cards because I paid off my insurance ahead of time but I sold my old car so I am getting a refund for it and then the only card that will have a balance is the 380 on my Mac . I have about 6500 in total credit available for my limit. I also have Amex card with no preset spending limit.