Pre Approval from CARVANA and CAPITOL 1 but.....

[Anonymous]

Hey All,

As the title states I have been preapproved by carvana and capitol 1 for auto loans.

I have never had a car payment before and I spent the last year building my credit back from a tough spot in life.

I was approved for $55k with capitol 1(which i figure is bs but who knows).

My scores are hovering barely above 600 (615ish)

The preaprovals are all showing me interest levels that are terrifying (16-18%).  I have stayed away from car notes for this reason but I am in a predictament where I wil need a working reliable vehichle for my family and work and I don't have much saved for a cash payment.

With scores like mine (615 avg) should I expect to get a better interest rate with credit unions etc or is this how it is for the first car?

I am trying my best not to make a hasty decision but its getting to that place. I have about $1k and a barely driving vehicle to put down on the loan.

Thanks so much in advance

[Loquat]

It'll be hard to guess at what your interest rate will be without knowing what is causing your score to be so low. Do you have any recent repo's, BKs? etc?

Please chime back in with a little more info about your overall profile and history and you may be able to get some better responses.

[Anonymous]

Thank you, I didn't even think of that.

I am currently hovering at 615 on all 3 accounts. This was after a year of paying off and catching back up late payments and paying charge offs.

No BK, I do have high utilization on 1 card(70%), I had 3 lates that are now  30-60 days old. I also have one inquiry in the last 30 days. Besides that I have an installment loan that is current and student loans that are current. No car note history at all.

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@Loquat wrote:
It'll be hard to guess at what your interest rate will be without knowing what is causing your score to be so low. Do you have any recent repo's, BKs? etc?

Please chime back in with a little more info about your overall profile and history and you may be able to get some better responses.

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Not sure if that is enough information.

Thanks for your help

[4sallypat]

Carvana will be a bit higher (price wise) but they should approve you for a loan, albeit a higher interest rate.

Using Capital One, I'd go into the participating dealer and show them you are pre-qualified, then negotiate the best price and see if they can beat the finance rate.

The dealer will run multiple inquiries so be ready for that.....

Usually a secure loan (vehicle) is easier to get than non secured credit.

[incognitony]

You might have to pay that high interest and then refinance with a local cu. I  went from 18.99%to 6.99% after 7 months of payments with similar scores in 2016.

[4sallypat]

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@incognitony wrote:

You might have to pay that high interest and then refinance with a local cu. I  went from 18.99%to 6.99% after 7 months of payments with similar scores in 2016.

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Yes, that is a great strategy!

My son who had poor scores, got a car loan from CarMax at 14% and after a year of rebuild, he refinanced with his bank at 5%.

[dunn2500]

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@incognitony wrote:

You might have to pay that high interest and then refinance with a local cu. I  went from 18.99%to 6.99% after 7 months of payments with similar scores in 2016.

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i did the same...

CU are far better for lower scores and get that util down on that card, it will help some.....the rest is time