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Unsecured Loan Through Alliant CU

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TheCreditGuy19
Valued Member

Unsecured Loan Through Alliant CU

I've never had an installment loan of any kind so currently my credit profile is based solely on revolving credit accounts. In the Summer of 2021 I plan on getting a new car which will require a large auto loan (~50k) and even though I have over 100k in CLA, I'm worried that I don't have a good enough credit mix for a loan of that size to be feasible for me.

 

I was told that one thing I can do is open an unsecured personal loan through Alliant for $500 and just keep it open for 48-60 months after paying the balance down to like $50 with monthly reoccurring payments of $1. Which would add an installment loan to my credit profile thus bolstering my credit mix in time. 

 

Does an approach like this make sense, and if so Alliant is giving me options for why I'm considering the loan with one of the options being "building/rebuilding credit" which is exactly what I want to do. So I ask you all to please provide any advice for me given this strategy I've laid out and whether or not you feel as though doing this will be better or worse for my credit profile overall.

 

Thanks for any advice in advance!


Message 1 of 13
12 REPLIES 12
Dumbee
Established Contributor

Re: Unsecured Loan Through Alliant CU

I don't think there's any reason not to get it if you want points and mix.

 

There's some big threads on it around here, but I assume you get the gist.


Smiley Embarassed
Personal/40.15K Biz/23K POT/17K
Message 2 of 13
recoveringfrombk7
Established Contributor

Re: Unsecured Loan Through Alliant CU

Do a SSL through NFCU.  Alliant no longer does SSL.  











Desired BK recovery line up complete 7/12/2021. Planning to garden until 8/2023 and potentially try for AMEX.
Message 3 of 13
Revelate
Moderator Emeritus

Re: Unsecured Loan Through Alliant CU

Unsecured or secured doesn't matter, all installment loans count similarly for FICO 8 and apparently FICO '98 '04 and 9 too.

 

Why do you think you wouldn't be able to get an auto loan though?  Auto loan size is based on income generally, credit is rate.

 

That said you could improve your auto industry option scores with an installment loan on file too, Alliant isn't a bad choice for such things though if you can come up with $500 a secured loan through Navy or Penfed will allow similarlly, but an unsecured loan would be fine too just playing with bigger dollar amounts and you wouldn't have to tie up your own money at all.




        
Message 4 of 13
TheCreditGuy19
Valued Member

Re: Unsecured Loan Through Alliant CU


@recoveringfrombk7 wrote:

Do a SSL through NFCU.  Alliant no longer does SSL.  


I recently signed up for NFCU so thanks for the tip!


Message 5 of 13
TheCreditGuy19
Valued Member

Re: Unsecured Loan Through Alliant CU


@Revelate wrote:

Unsecured or secured doesn't matter, all installment loans count similarly for FICO 8 and apparently FICO '98 '04 and 9 too.

 

Why do you think you wouldn't be able to get an auto loan though?  Auto loan size is based on income generally, credit is rate.

 

That said you could improve your auto industry option scores with an installment loan on file too, Alliant isn't a bad choice for such things though if you can come up with $500 a secured loan through Navy or Penfed will allow similarlly, but an unsecured loan would be fine too just playing with bigger dollar amounts and you wouldn't have to tie up your own money at all.


It's really about ensuring I have the greatest chance of getting the best rate moreso than getting the loan amount. Although I have little to no knowledge of auto loans so I was unaware they are income dependent for the size of the auto loan.

 

What are the typical income ratios, e.g. 100k income allows for a 50% auto loan of 50k?


Message 6 of 13
Revelate
Moderator Emeritus

Re: Unsecured Loan Through Alliant CU


@TheCreditGuy19 wrote:

@Revelate wrote:

Unsecured or secured doesn't matter, all installment loans count similarly for FICO 8 and apparently FICO '98 '04 and 9 too.

 

Why do you think you wouldn't be able to get an auto loan though?  Auto loan size is based on income generally, credit is rate.

 

That said you could improve your auto industry option scores with an installment loan on file too, Alliant isn't a bad choice for such things though if you can come up with $500 a secured loan through Navy or Penfed will allow similarlly, but an unsecured loan would be fine too just playing with bigger dollar amounts and you wouldn't have to tie up your own money at all.


It's really about ensuring I have the greatest chance of getting the best rate moreso than getting the loan amount. Although I have little to no knowledge of auto loans so I was unaware they are income dependent for the size of the auto loan.

 

What are the typical income ratios, e.g. 100k income allows for a 50% auto loan of 50k?


It's actually more about payment size and since that varies wildly based on term hard to say.  Auto loans are the easiest things to qualify for though, it's not much of an issue.




        
Message 7 of 13
Janus
Senior Contributor

Re: Unsecured Loan Through Alliant CU

I ditto the SSL via NFCU, paying that down to the 9% will have the biggest boost to your score. FYI most Lenders will loan to people in 600-640 range, do you fit in to that range? 

 

As for the car you first have to decide what it is you want, and then what you can afford your monthly payment to be. Then asap start saving that monthly payment into a seperate untouched account until you're ready to buy. For $50K on 60 mo term at 3.5% your payments would be roughly $980 give or take. 






Message 8 of 13
TheCreditGuy19
Valued Member

Re: Unsecured Loan Through Alliant CU


@Janus wrote:

I ditto the SSL via NFCU, paying that down to the 9% will have the biggest boost to your score. FYI most Lenders will loan to people in 600-640 range, do you fit in to that range? 

 

As for the car you first have to decide what it is you want, and then what you can afford your monthly payment to be. Then asap start saving that monthly payment into a seperate untouched account until you're ready to buy. For $50K on 60 mo term at 3.5% your payments would be roughly $980 give or take. 


Assuming I optimize my cedit profile my credit score would be high 700's, have even eclipsed 800 before so not worried about that aspect. I'd probably be looking at either Alliant or NFCU for the auto loan since they both offer rates for new cars.

 

I'm looking at a Tesla model 3 or Y, but with an assumed down payment I'm guessing 50k will be what my loan ultimately is. 


Message 9 of 13
coldfusion
Community Leader
Mega Contributor

Re: Unsecured Loan Through Alliant CU


@Janus wrote:

I ditto the SSL via NFCU, paying that down to the 9% will have the biggest boost to your score. FYI most Lenders will loan to people in 600-640 range, do you fit in to that range? 

 

As for the car you first have to decide what it is you want, and then what you can afford your monthly payment to be. Then asap start saving that monthly payment into a seperate untouched account until you're ready to buy. For $50K on 60 mo term at 3.5% your payments would be roughly $980 give or take. 


That's not the right way to do it.

 

First thing is to figure out how much you can afford including factoring in interest rate, auto insurance and sales/excise taxes and tthen use that to set your expections appropriately on the basis of a 4 year, or absolute worse case 5 years.   A $50K auto loan with $100K gross income for many people is is going to be a stretch partly due to DTI concerns.  You gotta be able to pay rent/mortgage and eat while keeping a few bucks stashed away for emergencies too....

 

 

 

(11/2022)
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Artist formerly known as the_old_curmudgeon who was formerly known as coldfusion
Message 10 of 13
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