in april of 06 my bf had to get rid of his old car, He BEGGED me to help him get a new car. And got screwed. We got a new car and traded in his car, which he owed about 4 G's more than it was worth. Long story short, I co-signed and he got the car for 26 G's 19% interest rate for 72 mon. this was mainly due to his awful credit, mine was fair (had a score of 640 at the time). Now, I am in need of a vehicle and I was wondering what to expect to pay for my loan. Since co-signing my score took a huge blow, its gone down to 579. I'm paying off a collection, and payed off my credit card. will help that help? plan on getting a 22 G dollar car and plan to put down 5's. will this help with not getting completely shafted on the loan or help me even get one at all? I'm so afraid of getting a no because the other loan is still new. you guys have any advide that would help me get a loan or a half decent rate? been paying EVERYTHING on time, including the car. I plan to buy my car in Dec. HELP PLS!
2006-09-07 18:58:47 · 8 answers · asked by Alejandra J 1 in Cars & Transportation ➔ Buying & Selling
First of all, it seems odd to me that your score would have dropped 61 points from opening a new loan. Have you applied for additional credit since then or had collections to report as owed on your credit bureau? You may want to verify that the information contained in the bureau is accurate.
Second, do not apply for any credit at all until the time that you go to purchase your car. Each time you apply for new credit and each new credit line you open adversely affects your credit score.
Third, be sure that you follow up to make sure your boyfriend is paying all payments on the loan as agreed. A late payment could prevent you from buying anything at all on credit.
Fourth, do not for any reason let the dealer know how much money you intend to pay as a downpayment on the loan. You're not one of my customers so I can tell you the truth. The dealer will not negotiate the price if they think you are paying a large downpayment because lowering the price of the vehicle also lowers their profit.
Finally, think long and hard in the future before cosigning with anyone. From my experience, you would have qualified for a 9% to 12% rate based upon your credit score. Now that you have signed a loan for him, you will pay more for your vehicle in the end because you will be charged a higher interest rate. In the end, you suffer for his negative credit rating.
2006-09-15 08:13:10 · answer #1 · answered by ncmom 3 · 0⤊ 0⤋
Your credit score is only part of the battle that you're probably going to face when trying to buy an additional car under your name.
1st - The loan you co-signed with your boy-friend is fairly new. (Meaning there is not a long history established)
2nd - You said you have had collection issue in the past; how long in the past? Even though it's paid, if it was a recent pay, lenders will look at that and also look at how long was it in collections before you paid (they can tell this by the payment status, i.e. 30 day late, 60, 90, 120, etc)
3rd - What is your current debt to income ratio. Even if you get pass the credit issues that you've had, can your income substain a new vehicle loan PLUS is your boy-friend defaults on his? A lender is definitely going to look at that. They take into consideration cost of living and your current dependent status (meaning if you have kids) also. This is probably going to be the hardest part to overcome.
From your post you said your boy-friend (as well as you because you co-signed) have a loan for 26K @ 19% x 72mo = 607/month car payment. Just guess that you'll probably get the same interest rate that you just got in April, then you wanting to finance 22K @ 19% (just guessing) x 72mo (which is definitely what your going to have to go with if ANY bank even considers you for a loan) = 514/mo payment.
So you looking at well over 1K/month for payments and insurance. Unless you have a heck of a income and long gevity with your employer, then you're probably going to get either denied completely or have to take a car of an extremely lesser value with shorter terms and still pay a higher interest.
The only bank that I know that will possible even consider such a situation is Credit Acceptance Corp, they'll pretty much finance anyone with an EXTREMELY high interest rate...well exceeding the 19% you and your boy-friend are currently paying.
I know this probably isn't what you wanted to hear, but it is what is it...the truth.
Good luck to you.
2006-09-09 05:29:28 · answer #2 · answered by Loquat 3 · 1⤊ 0⤋
Well...first things first. Your credit score is a SMALL part of you getting a loan. Most BANKS will need a minimum of 600 as a score before they will look at the rest of your report to make a decision. If you have a current collection on your name regardless if you are paying it off, you will not qualify for a PRIME car loan rate. No matter how you slice it you will be at a NON-PRIME rate. My guess (without seeing your credit report) is you would qualify for roughly what your BF qualified for. Secondly, you have a BIGGER obstacle to get over, and that would be your DEBT SERVICE RATIO. Because of the fact you have a car loan already on your name (REGARDLESS IF YOU ONLY CO-SIGNED) you will be in a situation where you might not have enough INCOME to show you can afford both cars.
Where do you live?...Canada?...USA?....let me know...I might be able to help.
Did I mention this is what I do for a living?
2006-09-08 03:42:50 · answer #3 · answered by B_Auto 2 · 1⤊ 1⤋
Usually, just adding one loan doesn't drop your score that many points,
have you been applying for a lot of credit since then?
I suggest making sure all your payment are on time, do not apply for ANYTHING and in November go to www.roadloans.com
and see what they will approve you for.
Being that your credit score is till over 550 and you have a downpayment, you may still be financeable if your bills are all current and your debt to income ratio isn't too terrible.
2006-09-12 08:21:05 · answer #4 · answered by msdagney 4 · 1⤊ 0⤋
Buy used until that other loan is paid up. You cannot afford this new car. Try to get your name off the other loan (he's not the one that got screwed you did). It is going to go sour sooner or later (and don't even think about giving him any lip he owns you now)! Protect what's left of your credit at all costs.
2006-09-11 23:54:16 · answer #5 · answered by Brian M 4 · 0⤊ 0⤋
You need to get your name OFF his loan NOW.
Having a car loan with your name on it will only hurt your chances of getting a loan at all.
Even if you are a co-signer on his loan it is hurting your "income to debt ratio" as well as your credit score.
He has GOT to get a lender to re-finance his loan WITHOUT you on the loan.
You need this to happen NOW if you are going to buy a vehicle in December. When that debt has been removed from your credit profile, your credit score will go up, & your income/debt ratio will be improved.
The liklihood of a lender giving you an auto loan AT ALL in your currant situation is very slim.
2006-09-08 03:51:54 · answer #6 · answered by Vicky 7 · 1⤊ 1⤋
why do you need a new car and payment? are you sure your bf will payoff the loan? try to get him his own loan. ive seen more of these type of loans go bad then paid off. consider a little tlc for your current car. 2k can keep your current car in great shape. until the bum gets his own loan
2006-09-07 19:28:12 · answer #7 · answered by chriscarguy 2 · 0⤊ 1⤋
you will have your boyfriends payment and yours. ok now you do the math. good luck
2006-09-09 19:36:12 · answer #8 · answered by Billy T 6 · 0⤊ 1⤋