What should I do with the $4000 I have saved up?

[Anonymous]

Im planning on buying a car soon (for work) and was wondering if I should put $4000 down to get a better interest rate....OR....should I use it to pay down my Discover card which currently has a balance of $7500 with a credit limit of $8200. I know my utilization rate is affecting my credit score which is currently at 640 and by paying it down to $3500 would put me at less than 50% utilization.

Am I better off paying down my Discover to get a better score and then a better rate. OR should I use it to try and get a better interest rate on the auto loan.

My brother got a loan through Capital One and he said they don't even ask for a downpayment, but Ive heard credit unions, banks, and dealers usually will give you a better interest rate with a bigger down payment.

Another question: What happens to my credit score after I get an auto loan?

Any help or advice is greatly appreciated!

[Anonymous]

Hello,

I think you should pay down your credit card.  Do the math and see how much money on the payment you will be saving if you put the money down on the car.  I think you will see that you will save more money by paying down the credit card then investing it into another debt.  Is it an option to use the $4000 and purchase a used car which will allow you to put the car payment money toward your debt on the credit card? MG

[Anonymous]

Pay down the credit card with $3500 and put $500 down on a good, clean 2-3 year old used vehicle with a warranty. A new car will simply put you back a few thousand dollars again the minute you drive it off the lot because of the depreciation.

And then, attack that Discover card every month with more than the minimum payment... get it paid off as quick as you can! Good luck car shopping!

[Anonymous]

Yep, I would pay the CC, it probably will have a much higher rate than a car loan.

[Anonymous]

Yeah, I think I'm gonna payoff my credit card first. They're killing me with interest at 20%. They jacked up my rate after having a few lates, but after Aug. it'll have been a year since any lates so I plan on asking for a rate decrease.

I figure I'm probably better off just getting a loan through Capital One or HSBC (without having to put anything down) and paying maybe 11% instead of 20%.

Does anyone know what other lenders don't require a down payment besides Capital One and HSBC? I'd like to compare rates. Do most credit unions/banks require a down payment? I have a 12 month $10,000 CD secured loan through Wells Fargo that will be finished paying in September (no lates) and was thinking about seeing if they could get me a good rate.

Message Edited by digitu on 08-23-2007 08:10 PM

[Anonymous]

Hey, I'd definately go to Wells Fargo and visit with a loan officer about a car loan, since you already have a good payment record with them. I've heard they can be very competitive on interest rates. Let us know how it goes!