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Obtaining a secured personal loan when DTI is high?

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Anonymous
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Obtaining a secured personal loan when DTI is high?

Been having trouble obtaining a secured personal loan due to my debt to income ratio. I have pristine credit and the ONLY debt I have is my mortgage, however, I keep getting declined for a small $15k loan. Even a credit union has turned me down. This is very frustrating as I can easily afford the $200.00 a month payment for the loan...the only options I'm seeing are those 15% interest "payday" type loans and I don't want to go that route. Anyone run into this and found a solution? Point me in the right direction? Appreciate everyone's time!!

Message 1 of 8
7 REPLIES 7
Anonymous
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Re: Obtaining a secured personal loan when DTI is high?

Welcome to myFICO! 

 

What is your DTI currently? Income and mortage payment? 

 

Have you tried peer to peer lending?

Message 2 of 8
Anonymous
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Re: Obtaining a secured personal loan when DTI is high?

You can't get a "secured" personal loan? Or did you mean unsecured? With secured personal loans, the lender generally doesn't care about DTI since the loan is fully collateralized with a deposit.

Message 3 of 8
Anonymous
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Re: Obtaining a secured personal loan when DTI is high?

Thank you so much for taking the time to respond everyone. I'm honestly a little surprised I'm getting such a hard time. I make about $45k-$50k a year gross with about $3,500.00 a month gross. My mortgage is for $350k with a $2,300.00 a month payment. That's my ONLY debt. As fas the loan itself I did apply for a "secured" using my car which I own outright as collateral. Still just denied right off the bat with a credit union due to DTI. Peer to Peer lending? I'm going to have to look into that...

Message 4 of 8
CreditDunce
Valued Contributor

Re: Obtaining a secured personal loan when DTI is high?

To see if you qualify for some of the common p2p loans, try:

CreditKarma - Avante, Lending Club, Prosper

Quizzle - Lending club affiliate

Credit.Com - is also happy to be a middle man for personal loans

I am sure there are other pre-approval sites.  There are tons of p2p lenders now.

 

The above sites should all be SP's to see if you are approved and at what rate.

 

Message 5 of 8
Anonymous
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Re: Obtaining a secured personal loan when DTI is high?

The banks I have worked at go up to 45% DTI for an auto loan (lowest RL), about 10-15 bps lower for unsecured. Credit cards are the most lenient usually at 50%. You are currently at 65%...so it will be tough to impossible. The bank wants to make sure you have enough left over for your other miscellaneous life expenses and aren't over extended. Brick and mortar is going to be conservative. Even though its secured by the car the bank doesn't want to go through the hassle of repo, and on an auto loan the interest earned isn't enough to make it worthwhile usually. How much is the auto loan you are trying for and what would the payment be/the new DTI? 

 

Looks like p2p lenders (at least prosper and lending club) don't count mortgage payments into DTI, and go up to 30%. Since you have no other debt you should be good here. You can get preapproved on their respective websites with a SP. 

Message 6 of 8
Anonymous
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Re: Obtaining a secured personal loan when DTI is high?

15% for unsecured personal loans is actually not that high (real "payday" loans will have something like 150% rate). Also, your desired loan amount is unrealistic with $200 monthly payment. Even at 5.99%, which is probably the lowest rate you can get for a personal loan, monthly payment would be $289.92 over 60 months for 15k. Even if you have $15000 in savings/CD and use that to get secured loan, you still have to pay $260-270 a month. You might want to check out online lenders to see what they may offer, but basically it'll be tough with traditional lenders with 65% DTI, since I think 50-60% is the typical cutoff. Have you considered mortgage modification?

Message 7 of 8
Anonymous
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Re: Obtaining a secured personal loan when DTI is high?

What about trying another angle... what are you trying to do with the loan? If its something specific you may be able to apply for something else that would work out better...

Message 8 of 8
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