Will my boyfriend be approved?

[Tinkerbell319]

He is trying to finance a 2015 Dodge Charger RT that's priced at $26,000. We will be going down to the dealer next Friday where he will have them run his credit. Just kind of wanted to know the likelihood of approval. A friend was telling him that he will have to settle for a piece of crap due to him having NO "AUTO" history. 

Current Scores: 734 TU - 710 EXP- 712 EQ

Credit Union Secured Card: $2,500 Limit - 1 year - 1 month history - No lates - Low balance

Green Dot Secured Card (which is my card, but he's an authorized user): $500 - 1 year 4 months - No lates - Low Balance and report to all 3 of his reports

MyJewelers Club: $5,000 limit - 3 months - no lates - low balance

Installment loan for a jet ski: $12,500 - 1 year history - no lates - with $7,000 balance. (This is not an auto loan, it's actually a "pawn shop" like business in Cleveland where they will allow you to do in house financing and report to your credit). It shows up on credit as "Abiding Acceptance" 

Income: $3,200 per month, been on the job for 2 years. 

Downpayment: $1,500

[trusty]

Anyone can get approved for a car loan, especially at the dealer. The question is: Will the interest rate be affordable?

With a credit score in the 700's, I would recommend to apply for an auto loan with your local bank or credit union; in which there has been an active bank account with good history - for at least a year. Based on a banking relationship, the rate should be much better. Then, you will also know how much the bank is willing to lend.

If the bank route is a no go, or isn't enough... then you'll probably get a ridiculously high interest rate at the dealer; and a bunch of credit inquries - as they shop around the credit file for bids.

But, as long as you have the paystubs... they will make sure to sell you a car. - It's what they do for a living.

Either way, Hope it all works out.

[Anonymous]

I don't think he will have any trouble getting a loan.  A big factor is DTI.  It depends on what your monthly payments are currently according to income(rent/mortgage, other monthly payments, etc).  I think he should get financed before going in.  Has he considered the credit union that he already has a relationship with?  CU's usually have pretty decent rates for cars.

You can even try Capital One's prequalifier.  It is only a soft inquiry so don't worry about your score dropping.  Fill out the info and see what kind of rates they could offer you.  You may be surprised.

When you say low balances, how low are they?  Have you figured out his DTI?

[Anonymous]

Is this a Dodge dealer or a used car dealer? Also as others have said look at walking into the dealer with your own financing already. I've been in the industry a long time and $26k is a lot for a 4 year old car. How long will you be financing it? With such a low down payment it sounds like you're looking at 48 or 60 months. Be careful doing that. You will almost. Be certainly be upside down on the loan after the first year. Not a good position to be in.