Questions about getting a car loan.

[Tric]

Just have a few questions...

So back in 2010 I lost my job and fell behind on all payments about 90 days past due.. on a few Credit cards and other bills..But never went to collections because I worked with the creditors. .. I dug myself out hole and now have no debt.. well just $100 on a Credit card LOL.. now my rating is around 650 has gone way up in the last year.. and even with a car payment of $450 a month my Credit to Debt Ratio would be well below %40

So my question is would I qualify for a new lease or to finance with the 90's no payment not cash.. and if I don't would a co-signer fix that?? just wondering if I should wait a few more months till my rating is over 700 or will I get a good loan at 650 with a co-signer? And if I go ahead I would get the protection to cover for job loss or lay off just to make it look better for the banks even tho i'm in a very stable job now.


Thanks

[CarLadyLisa]

Hey Tric,

This is a very personal question that really only the bank can answer. What I tell those who are concerned about their credit is "Don't worry". Why? Well it is our job to get an approval. There are different lenders we work with and until a dealer runs an application, we really don't know. The bank will tell us what is required.

So my advice to you...Choose the car you love & want. If you know you can afford the payments then do not worry. That last thing you want to appear is desperate or concerned and jammed into a vehicle you aren't happy with. Don't make the approval a thing.

At the end of the day, if the bank says no we can't hold you to the vehicle.

[m_bisson]

Whatever you do, don't go to one of those places that advertising "we finance anyone".

Do NOT settle for a ridiculous interest rate. You're better off paying cash for a cheap used car.

There's a reason your credit went to shit in the first place, don't make the same mistake again. Get a car you can actually afford, not your dream car. This might mean buying used.

[Tric]

Whatever you do, don't go to one of those places that advertising "we finance anyone".

Do NOT settle for a ridiculous interest rate. You're better off paying cash for a cheap used car.

There's a reason your credit went to shit in the first place, don't make the same mistake again. Get a car you can actually afford, not your dream car. This might mean buying used.

Its called getting laid off for a year.. And my credit is good now this all took place 5 years ago..but I still had some r9's on my credit report for another 2 years till they hit the 7 year mark... In the End I got a good rate 2.5% at 6 years with Gap insurance and LOE insurance as well.. .. ... picked up a GT Mazda 3 2015... its opened ended the loan so I can put extra on at any time.. I pick up my 3 on Monday.. even with the car payments and my rent my Gross Debt Service ratio is below 20% so I'm good... looking forward to doing some mods the the car soon too.

[Jeff-TheBiz]

Its called getting laid off for a year.. And my credit is good now this all took place 5 years ago..but I still had some r9's on my credit report for another 2 years till they hit the 7 year mark... In the End I got a good rate 2.5% at 6 years with Gap insurance and LOE insurance as well.. .. ... picked up a GT Mazda 3 2015... its opened ended the loan so I can put extra on at any time.. I pick up my 3 on Monday.. even with the car payments and my rent my Gross Debt Service ratio is below 20% so I'm good... looking forward to doing some mods the the car soon too.

2.5%??? That's higher than it should be.. also what is LOE insurance?

[Tric]

2.5%??? That's higher than it should be.. also what is LOE insurance?

its loss of employment insurance. Pays my car payment if I'm laid off or sick.. Or anything moreless.. And 2.5% is the best someone like me can get with a 660 credit rating and no co-signer.. Also the fact I still have r9s on my credit file from 5 years ago.. I'm happy with that rate.. Its the best rate I could get after looking into 8 different financial institutions.

[Lmmorden]

Credit scores over 600 is considered good, over 750 is considered excellent..

Consider letting the dealership take care of your financing needs.. If you don't like the rate then go elsewhere

[m_bisson]

6 years at 2.5?

Your money, I guess. But it seems to me like you completely ignored my advice about buying within your means.

[Cab0oze]

6 years at 2.5?

Your money, I guess. But it seems to me like you completely ignored my advice about buying within your means.

Could not agree more. Unfortunately it is so easy to get loans now and everyone wants to have all the latest toys right away and completely disregard the fact that they cannot afford it. That's right... if it takes you 6 years to pay off the car that means you cannot afford it now.

6 years is a long time to be paying off a debt. You got laid off once, so I'm going to go ahead and assume you don't have the most stable job in the world. A lot can happen in 6 years, and I can pretty much guarantee you there will be a recession during that timeframe. Are you prepared for that?

[Flagrum_3]

6 years at 2.5?

Your money, I guess. But it seems to me like you completely ignored my advice about buying within your means.

Well what's done is done. I'd say 2.5% is not bad if it covers LOE and with his credit history. He also states his GDS is below 20% including the car payment, which is pretty good. So basically I'd assume he's locked into the contract since he's getting the car Monday. Best thing now is take advantage of the low GDS and make them extra payments, if possible, and get her paid off asap.

@Tric- Good luck with the new car and congrats.


_3

[Tric]

Well what's done is done. I'd say 2.5% is not bad if it covers LOE and with his credit history. He also states his GDS is below 20% including the car payment, which is pretty good. So basically I'd assume he's locked into the contract since he's getting the car Monday. Best thing now is take advantage of the low GDS and make them extra payments, if possible, and get her paid off asap.

@Tric- Good luck with the new car and congrats.


_3

Thanks. That's the plan.. Putting extra on this car every month and have it paid off in no time. Really excited.. Already have my 2005 Mazda3 sold as well

[m_bisson]

Thanks. That's the plan.. Putting extra on this car every month and have it paid off in no time. Really excited.. Already have my 2005 Mazda3 sold as well

Does this mean you are currently in possession of the cash you sold your 2005 for?

If you are, then drop it off tomorrow as a down payment on your car. It'll instantly lower your monthly payments which means less money lost to interest.

[rajin929]

2.5% for 6 years isn't terrible. The interest rates on car loans from banks are much higher, they often tell customers their best bet is to finance through dealer.

OP, congrats and good luck with your purchase. Going from a 2005 to a 2015, i'm sure the new car will serve you well for many, many years

[MrClark]

semi-off topic.

I'm happy with my car loan, despite that I rolled in >7k negative equity, I qualified for 1% interest which is costing me peanuts. It sucks that its over 7 years but I can focus on other higher debts (LOC @ 10% and CCs at 11% & 19.5%) and my car is sound and secure. Plus that unlimited mileage warranty was a spicy number I could not pass by.

I just wish I had the xenon lights as opposed to the halogens, they look so much sexier... (probably first mod).

[MikeyGT]

semi-off topic.

I'm happy with my car loan, despite that I rolled in >7k negative equity, I qualified for 1% interest which is costing me peanuts. It sucks that its over 7 years but I can focus on other higher debts (LOC @ 10% and CCs at 11% & 19.5%) and my car is sound and secure. Plus that unlimited mileage warranty was a spicy number I could not pass by.

I just wish I had the xenon lights as opposed to the halogens, they look so much sexier... (probably first mod).

Dam. 10% on a LOC. I thought I had a high interest rate on LOC.

Too bad you can't roll over all your expenses to your car loan