Why am I only getting approved for 10,000?

[Anonymous]

Hi everyone!

Ok so basically, I am a first time car buyer. I have to do it all on my own *yay* lol Anyways, I am looking to buy a car that is between 13k-17k. I NEED a decent running car for once! I have had nothing but crap cars the past few years (I am 22 now). So my credit scores are average like 669 and 680, etc. I have had one secured credit card for the past two years that is in perfect standing. No major marks on my report. I make about 25k annual income a year. I should be able to get a 15k loan from what I have heard but so far only Chase bank has approved me for 10,000 :/ Please help! Where can I go to get approved for 15k? So that I can actually get a car again lol

[choppa02]

Have you tried a credit union?... I make a little over 27k a year and everyone kept approving me for 15k and below before I tried roadloans who approved me for 19.3k @11% apr not great but the car I want is in that price range

[StartingOver10]

You have three issues that are hurting you: 1) your income and 2) this is your first vehicle loan and 3) the only credit experience you have is with a secured card.

There are plenty of good cars in the $10k range. Did you make application with the dealership or your CU? You are far better off going to a CU rather than the dealer. You will probably get a very high interest loan at a dealer unless you have an approval with a CU first. And even if you have that approval the dealership has lots of tricks to stick you with a high rate anyway. For your first vehicle have the CU finance it so you don't run into those tricks (look up car dealer scams and study the methods so you know before you go to buy).

Keep in mind that $10k is already nearly half your gross income.

Looking for a $13k to $17k vehicle is unrealistic for your income unless you have a very large down payment.

Don't put yourself in such car debt that you stand the chance of losing the vehicle (high debt/high payments in relation to your income = lots of stress).

Use some restraint here so you don't end up with a repo on your credit for your first vehicle loan.

[jackg]

First, try to find a CU to join. NFCU is the biggest & best but if you don't qualify look for a local one to join. Open checking & savings accounts with them.

You say your income is about $25K, is that net or gross? Do you have any credit history at all?  Do you know your FICO scores? Have you pulled your free credit reports this year yet to see your history? My first impression about Chase being willing to loan you $15K for a car is surprise, that's 60% of you income, way too high. That itself will put you deep in to the negative category of credit utilization usage.

You're probably going to have save some money to have a good amount for a down payment. Next will be car insurance and because of the loan you'll probably have to have full coverage and for someone of your age the cost will be substantial. Then there's gas & maintenance cost for it.

What you're looking for isn't going to be easy to find.

[StartingOver10]

^^^Actually, she wanted $15k but Chase approved her for $10k which is much better for her income situation (as posted).

OP, Chase is a good bank for auto loans, but a CU may (or may not) give you a better rate. It's worth checking out. 

[jackg]

OK, it's $10K not $15K but it's still 40% of her income & I suspect the $25K annual income is the gross, not net, income. Secondly, her best chance is a CU, not a bank.