Loan Denied?!?!?
04-07-2003, 04:48 PM
#17
The problem is not bad credt, but no credit. Car loans are tough for young people just out of college in their first job. Do not borrow the money from your father. You need to establish your own credit. Would he be willing to co-sign the loan? That would be much better and then you will have credit!
04-07-2003, 04:49 PM
#18
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i've used <a href="http://www.peoplesfirst.com" target="_blank">www.peoplesfirst.com</a> for my car note and their service has been top notch. my bank firstunion/wachovia offered me a loan but the conditions were 10% and a minimum of a 5 year loan...i literally asked the lady "are you nuts". thats buying a car for 10 and paying them 15....absolute ripoff artist. w/ peoples first over the coarse of the loan (30 months) i pay them 1100 bucks. i'm not sure if you'll run into the same issues w/ debt/income vs. years employeed but give them a shot...dont have to leave your seat.
edit: my bad wrong link use <a href="http://www.peoplefirst.com" target="_blank">www.peoplefirst.com</a>
edit: my bad wrong link use <a href="http://www.peoplefirst.com" target="_blank">www.peoplefirst.com</a>
04-07-2003, 05:18 PM
#19
</font><blockquote><font size="1" face="Verdana,Tahoma,Helvetica">quote:</font><hr /><font size="2" face="Verdana,Tahoma,Helvetica">Originally posted by originalsterm:
<strong>I just got off the phone. The problem is that I only have 1 credit card and have only worked for a short time. I need to have a co-applicant, not necessarily a co-signer. Any idea what this means? How will that effect the loan? Should I just buck up and borrow the cash from my Father?</strong></font><hr /></blockquote><font size="2" face="Verdana,Tahoma,Helvetica">You could just have your father be the "co-applicant." That way your father doesn't have to dip into his savings and you can build credit at the same time
<strong>I just got off the phone. The problem is that I only have 1 credit card and have only worked for a short time. I need to have a co-applicant, not necessarily a co-signer. Any idea what this means? How will that effect the loan? Should I just buck up and borrow the cash from my Father?</strong></font><hr /></blockquote><font size="2" face="Verdana,Tahoma,Helvetica">You could just have your father be the "co-applicant." That way your father doesn't have to dip into his savings and you can build credit at the same time
04-07-2003, 05:22 PM
#20
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I agree about the cosigner.
I had my dad cosign my first car loan, and after six months my credit rating jumped dramatically.
A cosigner with a good credit rating and a long history will also get you a much lower interest rate.
One credit card does not show enough history for them to know that you'll pay.
Banks also don't like loaning money for older cars, because a 16 year old car is more likely to have problems. And if you don't pay, they want to be sure they can repo something that works so they can recoup their investment.
My 87 951 is at twice the interest rate I got for my 03 acura (from the same bank).
I had my dad cosign my first car loan, and after six months my credit rating jumped dramatically.
A cosigner with a good credit rating and a long history will also get you a much lower interest rate.
One credit card does not show enough history for them to know that you'll pay.
Banks also don't like loaning money for older cars, because a 16 year old car is more likely to have problems. And if you don't pay, they want to be sure they can repo something that works so they can recoup their investment.
My 87 951 is at twice the interest rate I got for my 03 acura (from the same bank).
04-07-2003, 05:33 PM
#21
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try another institution.....credit unions are the best.
Funny story, about 6 months before I bought my first P-car (boxster) I almost bought a Saab convertible (I've owned many saabs over the yrs). For some reason Saab Credit (thru Chase) turned down my application (even though I made well into 6 figs and only wanted a $400/mo loan, and had recently been approved for a relatively big home loan, too). By the time i got it sorted out with Saab, the car I wanted was sold, and I was so pissed, I just said forget it. Luckily. Afew days later I happened to go to the porsche dealer with a friend, saw the just-released boxster, drove it, and realized I was stupid to buy a Saab turbo over a boxster when the Box was only about $10k more.
So, sometimes not getting a loan approved is a good thing
So, try another lender, and things may be different. Make sure you ask them first how much they would lend on a car of your's age to make sure they will even do it before you bother applying.
good luck
Funny story, about 6 months before I bought my first P-car (boxster) I almost bought a Saab convertible (I've owned many saabs over the yrs). For some reason Saab Credit (thru Chase) turned down my application (even though I made well into 6 figs and only wanted a $400/mo loan, and had recently been approved for a relatively big home loan, too). By the time i got it sorted out with Saab, the car I wanted was sold, and I was so pissed, I just said forget it. Luckily. Afew days later I happened to go to the porsche dealer with a friend, saw the just-released boxster, drove it, and realized I was stupid to buy a Saab turbo over a boxster when the Box was only about $10k more.
So, sometimes not getting a loan approved is a good thing
So, try another lender, and things may be different. Make sure you ask them first how much they would lend on a car of your's age to make sure they will even do it before you bother applying.
good luck
04-07-2003, 05:34 PM
#22
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Find out your FICO score. That will tell you a lot about where your credit stands. The bottom line is that you don't have enough credit history for most lenders to consider granting a loan for a used car.
If you need a co-applicant, maybe your father can volunteer. Basically they need to see someone with better/longer credit history be on the loan.
If you need a co-applicant, maybe your father can volunteer. Basically they need to see someone with better/longer credit history be on the loan.
04-07-2003, 06:24 PM
#23
Race Car
Thread Starter
I agree that having no credit is a big problem. A car loan is a good way to get credit. I wish my father could co-sign for me. But he works for a utility company here in NY and we just got hammered with an ice storm. He'll be working for the next couple of days before he comes home again. Not sure I can wait that long. Damn this is getting complicated.
04-07-2003, 06:41 PM
#24
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I couldn't have financed my '87 951 if I didn't have a great history w/ my credit union. Too old of a car. I just financed my first house through them this week, 128K, 30 yr mort. at 5.875%. Credit unions rock!
04-07-2003, 06:49 PM
#25
Race Car
</font><blockquote><font size="1" face="Verdana,Tahoma,Helvetica">quote:</font><hr /><font size="2" face="Verdana,Tahoma,Helvetica">Originally posted by Matt Sheppard:
<strong>I couldn't have financed my '87 951 if I didn't have a great history w/ my credit union. Too old of a car. I just financed my first house through them this week, 128K, 30 yr mort. at 5.875%. Credit unions rock!</strong></font><hr /></blockquote><font size="2" face="Verdana,Tahoma,Helvetica">That's awesome, congrats! Credit unions are great...I was able to get a loan for a few thousand a couple years ago [the day I turned 18 for the 968] because I had a stable job with solid income. They gave me a decent interest rate but required me to pay the balance in a pretty short time [18 months]. Little hassle and I paid it off early.
<strong>I couldn't have financed my '87 951 if I didn't have a great history w/ my credit union. Too old of a car. I just financed my first house through them this week, 128K, 30 yr mort. at 5.875%. Credit unions rock!</strong></font><hr /></blockquote><font size="2" face="Verdana,Tahoma,Helvetica">That's awesome, congrats!
Credit unions are great...I was able to get a loan for a few thousand a couple years ago [the day I turned 18 for the 968] because I had a stable job with solid income. They gave me a decent interest rate but required me to pay the balance in a pretty short time [18 months]. Little hassle and I paid it off early.
04-07-2003, 07:21 PM
#26
Rennlist Member
If at all possible, try to contain your enthusiasm and save up the dough. You will appreciate you ride more and the money you would have to spend on payments and juice will will have to put into improvements and repairs, and insurance.
04-09-2003, 01:33 PM
#27
Race Car
Thread Starter
Got a Loan!!!
I tried a few banks, finally I tried my old bank from when I lived with my parents. Since I had an account with them still (20 years now, since I was 4!!!), they approved a loan. Pending I can prove I have a job. How bad is a rate of 8.7%?
I tried a few banks, finally I tried my old bank from when I lived with my parents. Since I had an account with them still (20 years now, since I was 4!!!), they approved a loan. Pending I can prove I have a job. How bad is a rate of 8.7%?
04-09-2003, 02:06 PM
#28
Race Car
</font><blockquote><font size="1" face="Verdana,Tahoma,Helvetica">quote:</font><hr /><font size="2" face="Verdana,Tahoma,Helvetica">Originally posted by originalsterm:
<strong>Got a Loan!!!
How bad is a rate of 8.7%?</strong></font><hr /></blockquote><font size="2" face="Verdana,Tahoma,Helvetica">That's not bad.
<strong>Got a Loan!!!
How bad is a rate of 8.7%?</strong></font><hr /></blockquote><font size="2" face="Verdana,Tahoma,Helvetica">That's not bad.
04-09-2003, 02:29 PM
#30
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8.7 % is probably OK for your situation. In particular, what hurts you on this is buying an older car. The bank's risk is that you blow the engine, abandon the loan & car, and they're stuck with more remaining on the loan than they can get out of the car as is. They charge you a higher rate to cover the risk they're taking.
For future reference, some ideas that may help:
1) Don't be at all shy about asking any bank why you were turned down. Remember, you are the customer... they can't make money if they don't do business with you. Go to the branch where you applied; ask to speak to a personal service representative (different titles at different banks). Ask that person for specifics, and what you'd have to do / change to qualify.
2) Credit unions are usually a lot easier to work with, and may have lower rates. Find one you qualify for, and join now for future use.
3) When you have more credit history, you can finance almost any purchase with a personal loan, tho' since it's unsecured, the rates are usually higher than a standard loan.
4) On older cars, big % down payments help; they know you won't want to lose your share of the investment, so you're more likely to keep up the payments. Better chance of loan approval, and maybe a better rate.
Jim, admitting to being no expert on car financing.... but I do know that when you put down ~30% on a house, they ask fewer questions, and scramble to get you a good rate...8)
For future reference, some ideas that may help:
1) Don't be at all shy about asking any bank why you were turned down. Remember, you are the customer... they can't make money if they don't do business with you. Go to the branch where you applied; ask to speak to a personal service representative (different titles at different banks). Ask that person for specifics, and what you'd have to do / change to qualify.
2) Credit unions are usually a lot easier to work with, and may have lower rates. Find one you qualify for, and join now for future use.
3) When you have more credit history, you can finance almost any purchase with a personal loan, tho' since it's unsecured, the rates are usually higher than a standard loan.
4) On older cars, big % down payments help; they know you won't want to lose your share of the investment, so you're more likely to keep up the payments. Better chance of loan approval, and maybe a better rate.
Jim, admitting to being no expert on car financing.... but I do know that when you put down ~30% on a house, they ask fewer questions, and scramble to get you a good rate...8)