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Quick rebuild possible for new auto loan next month?

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Anonymous
Not applicable

Quick rebuild possible for new auto loan next month?

Hey guys, I've come for some of that wealthy knowledge from you all! Things finally started brightening up financially for me, at least these past few months. Continuation of an old thread - my corolla was totalled for flood loss in October. Two weeks after, my mercedes was broken into and cause of my work laptop bag with phone inside being taken, someone stole my identity. Bled out almost half of everything I had saved up. Was already somewhat playing catch up and wound up missing one payment on my nfcu card. I gave them everything including the police report of my identity theft, bofa paperwork showing losses, and they still refused to take off the late. In between then and now, the amg went down for service about once a month with a $1500-3k bill each time. So I decided to get something as a daily in the meanwhile. No smart move by me falling for a deathly loan at 14.99% for a used elantra for 11k in Jan. I've since refi with cap1 at 7%, still high but I saved almost $150 a month.

 

At this time, I'm more than willing to trade in the Merc and take the loss for a new or floor model vehicle from work but I'm trying to do this asap or preferably before the end of June (due to EV tax credit, or hope of merc not needing more service, trans is on its way out). From what I've been offered around from different vendors I can get at max $20k for it via vroom, leaving me $6400 to pay off. I've got about $8-9k to play with but am looking for guidance on a better score recovery to be able to finance the upcoming $50-60k car loan. I've already spoken with my sister who is graduating from college next week and my dad will be buying the elantra off me for her so that eases that loan off at least. I do have the following balances and wondering what course of action is best for better rates and who I should seek a loan from. Should I just let them give 17k for trade and carry over the 9k equity while still paying down cc balances, or pay down the difference and sell to vroom and pay down only some cc balances instead? Continue to snowball all the payments? Just shotgun everything down to 30% if possible? 

Current scores are:

603 EQ/ 630 TU / 606 EX and income is 140k. AAoA is 4y2m

Current balances are:

NFCU Visa Signature $10,135.08/$10,000.00 ** this had the missed payment and been fighting ever since 
NFCU cash rewards $1,585.10/$1,700.00
Capital One QS One $1,397.48/$1,600.00
Capital One QS $1,248.58/$1,300.00
Barclays Cashforward $802.06/$1,000.00
Credit One $502/$900
BestBuy CBNA 0/$500
Bank of America 0/$600.00 - just put in for a cli on this one and waiting

Nelnet $531/487

Nelnet $2118/2,000

 

Any insight is always appreciated!

Message 1 of 16
15 REPLIES 15
gdale6
Moderator Emeritus

Re: Quick rebuild possible for new auto loan next month?

With the amount of money you have to play with I would personally I would pay all CCs off except the big one and whack that one off max out by getting the reported balance at 89% or below. Nelnet I believe are SLs and they are installments so as long as they are either deferred or being paid on to keep current I would not worry about them.

Message 2 of 16
Anonymous
Not applicable

Re: Quick rebuild possible for new auto loan next month?

Had an unfortunate death in the family so dipped into this to give 5k. Now, with the remaining 3.5k, I don't know what would be the best dispersion. I was thinking either pay down both cap1 cards to sweeten them up as I have better/longer positive history with them and will have that paid off auto loan also, or try to knock down the nfcu 10k card a little and pif the other nfcu? With nfcu, I do have two baddies from last year but I'm wondering who I'd have a better chance with to finance.
What do you guys think?
Message 3 of 16
Anonymous
Not applicable

Re: Quick rebuild possible for new auto loan next month?


@Anonymous wrote:

Hey guys, I've come for some of that wealthy knowledge from you all! Things finally started brightening up financially for me, at least these past few months. Continuation of an old thread - my corolla was totalled for flood loss in October. Two weeks after, my mercedes was broken into and cause of my work laptop bag with phone inside being taken, someone stole my identity. Bled out almost half of everything I had saved up. Was already somewhat playing catch up and wound up missing one payment on my nfcu card. I gave them everything including the police report of my identity theft, bofa paperwork showing losses, and they still refused to take off the late. In between then and now, the amg went down for service about once a month with a $1500-3k bill each time. So I decided to get something as a daily in the meanwhile. No smart move by me falling for a deathly loan at 14.99% for a used elantra for 11k in Jan. I've since refi with cap1 at 7%, still high but I saved almost $150 a month.

 

At this time, I'm more than willing to trade in the Merc and take the loss for a new or floor model vehicle from work but I'm trying to do this asap or preferably before the end of June (due to EV tax credit, or hope of merc not needing more service, trans is on its way out). From what I've been offered around from different vendors I can get at max $20k for it via vroom, leaving me $6400 to pay off. I've got about $8-9k to play with but am looking for guidance on a better score recovery to be able to finance the upcoming $50-60k car loan. I've already spoken with my sister who is graduating from college next week and my dad will be buying the elantra off me for her so that eases that loan off at least. I do have the following balances and wondering what course of action is best for better rates and who I should seek a loan from. Should I just let them give 17k for trade and carry over the 9k equity while still paying down cc balances, or pay down the difference and sell to vroom and pay down only some cc balances instead? Continue to snowball all the payments? Just shotgun everything down to 30% if possible? 

Current scores are:

603 EQ/ 630 TU / 606 EX and income is 140k. AAoA is 4y2m

Current balances are:

NFCU Visa Signature $10,135.08/$10,000.00 ** this had the missed payment and been fighting ever since 
NFCU cash rewards $1,585.10/$1,700.00
Capital One QS One $1,397.48/$1,600.00
Capital One QS $1,248.58/$1,300.00
Barclays Cashforward $802.06/$1,000.00
Credit One $502/$900
BestBuy CBNA 0/$500
Bank of America 0/$600.00 - just put in for a cli on this one and waiting

Nelnet $531/487

Nelnet $2118/2,000

 

Any insight is always appreciated!


IIWY I would get my balances down under 88.9% ASAP. Your NFCU Signature Visa is at 101%; your Go Rewards is at 93%; your Cap1 QS is at 96%. Get each of those down, because anything over 88.9% counts as being maxed out & is dinging your score hard.

Message 4 of 16
Anonymous
Not applicable

Re: Quick rebuild possible for new auto loan next month?

This is where I'm at right now. Waiting for friday to pay down the nfcu signature and probably knock out the other cap1 balances as well. Can't wait for some statements to cut and scores to start moving! I hope the loan for the elantra falls off my report before I have to apply and that it comes with a small bump also since it'll lessen my DTI plus pif.  I played around with some simulators including the one on here which are all only telling me I'd probably only jump 10-25 points max from my most recent payments.

NFCU Visa Signature $10,135.08/$10,000.00

NFCU cash rewards 0/$1,700.00

Capital One QS One $1,097.48/$1,600.00

Capital One QS $350.00/$1,300.00

Barclays Cashforward 0/$1,000.00

Credit One $665/$900

BestBuy Citi 0/$500

Bank of America 0/$600

Message 5 of 16
AZEsq
Regular Contributor

Re: Quick rebuild possible for new auto loan next month?


@Anonymous wrote:

Hey guys, I've come for some of that wealthy knowledge from you all! Things finally started brightening up financially for me, at least these past few months. Continuation of an old thread - my corolla was totalled for flood loss in October. Two weeks after, my mercedes was broken into and cause of my work laptop bag with phone inside being taken, someone stole my identity. Bled out almost half of everything I had saved up. Was already somewhat playing catch up and wound up missing one payment on my nfcu card. I gave them everything including the police report of my identity theft, bofa paperwork showing losses, and they still refused to take off the late. In between then and now, the amg went down for service about once a month with a $1500-3k bill each time. So I decided to get something as a daily in the meanwhile. No smart move by me falling for a deathly loan at 14.99% for a used elantra for 11k in Jan. I've since refi with cap1 at 7%, still high but I saved almost $150 a month.

 

At this time, I'm more than willing to trade in the Merc and take the loss for a new or floor model vehicle from work but I'm trying to do this asap or preferably before the end of June (due to EV tax credit, or hope of merc not needing more service, trans is on its way out). From what I've been offered around from different vendors I can get at max $20k for it via vroom, leaving me $6400 to pay off. I've got about $8-9k to play with but am looking for guidance on a better score recovery to be able to finance the upcoming $50-60k car loan. I've already spoken with my sister who is graduating from college next week and my dad will be buying the elantra off me for her so that eases that loan off at least. I do have the following balances and wondering what course of action is best for better rates and who I should seek a loan from. Should I just let them give 17k for trade and carry over the 9k equity while still paying down cc balances, or pay down the difference and sell to vroom and pay down only some cc balances instead? Continue to snowball all the payments? Just shotgun everything down to 30% if possible? 

Current scores are:

603 EQ/ 630 TU / 606 EX and income is 140k. AAoA is 4y2m

Current balances are:

NFCU Visa Signature $10,135.08/$10,000.00 ** this had the missed payment and been fighting ever since 
NFCU cash rewards $1,585.10/$1,700.00
Capital One QS One $1,397.48/$1,600.00
Capital One QS $1,248.58/$1,300.00
Barclays Cashforward $802.06/$1,000.00
Credit One $502/$900
BestBuy CBNA 0/$500
Bank of America 0/$600.00 - just put in for a cli on this one and waiting

Nelnet $531/487

Nelnet $2118/2,000

 

Any insight is always appreciated!



I know this is not what you asked, but any reason why you need to take out a $50K car loan? Do you have a house? IMHO, I would absolutely NOT do this. I would definitely get rid of the Mercedes, but I would trade it for a used non-luxury vehicle with a payment sub $300 over 4 years by saving up to not roll in the negative equity. Then, I would pay off my credit cards, and save up for a house. Do you live somewhere that homeownership is impracticable or unaffordable? Then, I would save up to buy a duplex or a small apartment building and rent out units to pay the mortgage. You seem bright and motivated, just thought I'd throw this out there.

 

Yes, I heard what you asked. My answer is, you don't?!?!

Message 6 of 16
Anonymous
Not applicable

Re: Quick rebuild possible for new auto loan next month?


@AZEsq wrote:

@Anonymous wrote:

Hey guys, I've come for some of that wealthy knowledge from you all! Things finally started brightening up financially for me, at least these past few months. Continuation of an old thread - my corolla was totalled for flood loss in October. Two weeks after, my mercedes was broken into and cause of my work laptop bag with phone inside being taken, someone stole my identity. Bled out almost half of everything I had saved up. Was already somewhat playing catch up and wound up missing one payment on my nfcu card. I gave them everything including the police report of my identity theft, bofa paperwork showing losses, and they still refused to take off the late. In between then and now, the amg went down for service about once a month with a $1500-3k bill each time. So I decided to get something as a daily in the meanwhile. No smart move by me falling for a deathly loan at 14.99% for a used elantra for 11k in Jan. I've since refi with cap1 at 7%, still high but I saved almost $150 a month.

 

At this time, I'm more than willing to trade in the Merc and take the loss for a new or floor model vehicle from work but I'm trying to do this asap or preferably before the end of June (due to EV tax credit, or hope of merc not needing more service, trans is on its way out). From what I've been offered around from different vendors I can get at max $20k for it via vroom, leaving me $6400 to pay off. I've got about $8-9k to play with but am looking for guidance on a better score recovery to be able to finance the upcoming $50-60k car loan. I've already spoken with my sister who is graduating from college next week and my dad will be buying the elantra off me for her so that eases that loan off at least. I do have the following balances and wondering what course of action is best for better rates and who I should seek a loan from. Should I just let them give 17k for trade and carry over the 9k equity while still paying down cc balances, or pay down the difference and sell to vroom and pay down only some cc balances instead? Continue to snowball all the payments? Just shotgun everything down to 30% if possible? 

Current scores are:

603 EQ/ 630 TU / 606 EX and income is 140k. AAoA is 4y2m

Current balances are:

NFCU Visa Signature $10,135.08/$10,000.00 ** this had the missed payment and been fighting ever since 
NFCU cash rewards $1,585.10/$1,700.00
Capital One QS One $1,397.48/$1,600.00
Capital One QS $1,248.58/$1,300.00
Barclays Cashforward $802.06/$1,000.00
Credit One $502/$900
BestBuy CBNA 0/$500
Bank of America 0/$600.00 - just put in for a cli on this one and waiting

Nelnet $531/487

Nelnet $2118/2,000

 

Any insight is always appreciated!



I know this is not what you asked, but any reason why you need to take out a $50K car loan? Do you have a house? IMHO, I would absolutely NOT do this. I would definitely get rid of the Mercedes, but I would trade it for a used non-luxury vehicle with a payment sub $300 over 4 years by saving up to not roll in the negative equity. Then, I would pay off my credit cards, and save up for a house. Do you live somewhere that homeownership is impracticable or unaffordable? Then, I would save up to buy a duplex or a small apartment building and rent out units to pay the mortgage. You seem bright and motivated, just thought I'd throw this out there.

 

Yes, I heard what you asked. My answer is, you don't?!?!


Honestly, it may not 100% be a necessity but I do work for the company so it'd just make sense with owning one, as I am a part of the management team and the only one of them who doesn't own one. I figure since the benz is crapping out anyway, might as well make the jump before I end up in a hole on that. Repair wise, it's the bare minimum and with me working there, I can handle most of the work myself anyway. I'm pretty good with my finances for the most part so paying it off shouldn't be too difficult as I was always make extra payments on all my car loans that I've had (except when I lost my job). As far as the home ownership aspect, I will be acquiring an investment property through family but will resort to that last. As a personal goal, I'm aiming to buy my own house by age 30 so I've got another 2+ years and can more than likely begin working on planning before the end of this year. By then, I'll also have the majority of the baddies on my cr cleaned off, with the exception of last year.

 

This actually leads me into a somewhat different direction for the thread here. I'd like to try to develop relations with some better banks and hope that maybe a new car loan would be a good time to venture out of the garden also. Once my scores increase a bit, I was thinking maybe trying chase, amex, discover, even penfed, or potentially even opening a third navy fed or cap1. I just don't know of good rough score ranges these banks are looking for primarily before jumping into apps. I'm already out of the 5/24 and the newest card I have is the nfcu signature from 1/18. 

 

Message 7 of 16
Anonymous
Not applicable

Re: Quick rebuild possible for new auto loan next month?

So I zeroed out the cap1 qs and paid down the nfcu signature to 87%. Can't wait for the statements to cut! Should be next week. I'm thinking of potentially leaving the credit one and other cap1 with their balances rolling for now as I don't think they're hurting my score too much atm.
Message 8 of 16
AZEsq
Regular Contributor

Re: Quick rebuild possible for new auto loan next month?

The thing about luxury cars is that they come with a luxury lifestyle and big bills. If you're just going to work every day why pay to play? Is that job going to be your career? Is it subtly encouraged amongst management to drive those cars? Are you using it to attract a sort of woman to date--this type of woman will lead you directly into bankruptcy btw. Could you lease (HIGHLY DISCOURAGE, but if you're extra low mileage and could get a great deal as an employee, maybe)? I think that perhaps you're not understanding exactly how much a $50K+ car payment will affect your lifestyle. A suggestion that I've seen around and one I think is SUPER wise, is to figure out a reasonable payment on bankrate.com or some other site based on your credit and the average interest rate for the size loan that you're looking at and save that every month for 6 months. This serves 2 purposes: 1) A sizeable downpayment so your actual financed amount is much smaller and 2) It helps you absorb the payment shock and see if this is something you actually want to do. Also, actually quote out the insurance on this car and other bills (you have a Mercedes, you know how much oil changes, tires, and maintenance actually cost--though Mercedes used to include maintenance contracts in sale, most dealerships don't so consider it).

 

Understand this, buying a house in 2 years with a payment that size will be ROUGH. If you buy a car like that new, the depreciation is going to KILL you; if you buy used, the maintenance might! Unless you're willing to pay a 4-figure car payment, you'll be paying on it for 6-7 years. Financing anything longer than 4/5 years is a real mistake. I aim for 3--even if you finance longer, try to pay it off in 3.

 

Anywhoo, the point is, if you're looking into buying a home, you need to look at your realistic career and income potential. You'll need 2 years of steady income and they'll use your AGI to determine your debt to income ration (DTI). You'll need a low-ish DTI and the backend DTIs on conventional max out in the low 40s (if you don't understand this, google DTI calculator and actually calculate it). A car note the size of the one that you're talking about could torpedo your chances of owning a home that you'd like. That said, if you're not married and have no kids, I highly recommend trying to buy a fixer with a couple of units that you can rent out to cover your rent first--payment shock and 5% down (with good credit and the intention to occupy for at least 1 year). But that's definitely a thread for another day. Basically, I stand by what I said: Don't buy the car. You will regret it. Good luck.

Message 9 of 16
Anonymous
Not applicable

Re: Quick rebuild possible for new auto loan next month?

The primary reasons why I'd make the jump in this scenario is 

1) I manage the service division and am trained to work on the cars and most car work I can do myself. Not to mention as a Tesla, it's maintenance is bare minimum as it is, of which all is easily doable.

2) I'm paying roughly $600-$650 in gas monthly, plus $870 insurance. This cost would decrease to $0 in gas, as I can charge at work no cost (home or supercharging would be at max $100 depending on if I need to drive anywhere else), and $250 for insurance, of which I'd just pif for the 6 month policy at $1300. Currently, my car payment with insurance and gas equates to about $2100. Depending on what apr I'd get at 60 or 72 mo, i'd still be paying half of that and leaving me more room to pay extra or save extra. 

3) I keep the breakdown of my pay to allow a minimum 2k to save a month, and 3k for the car and/or repairs, plus whatever bills with the remainder. If I still continue with this method, I can still dump 2k into that payment if I wanted to and still save the extra 1k I set aside for repair funds, while driving a vehicle that isn't going to be a headache in the near future. 

4)I'm stabilizing at my job pretty well so I'd like to say paying 2k into that loan would give me a good year or two of payments to downsize on the loan while still saving so when it comes down to it, my actual DTI would be 15-20% not including what I'm paying extra and any changes that may come with raises etc. 

 

As for the home loan, I feel like my income is going to be sufficient but I do totally see where you're coming from and I do appreciate the insight. I mentioned that i'm going to get the rental property through family sometime soon anyway so that will just add additional income and if I decide to live there, potentially buying more time for the home buying process when I decide on that. For now, I don't have any additional obligations so that's why I was looking into this and hoping this could be a stepping stone into bettering my credit now that I had the funds to clear the majority of my cc debt. 

Message 10 of 16
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