School me on loan rates, general financial advice

**86 IROC-Z** · 02-16-2009, 11:15 AM

So, I'm thinking about getting a new car. I have wanted one ever since forever, but as I will soon have a steady income, I'm playing around with ideas of financing one.

When applying for an auto loan, what factors determine the rate you get and how much they allow you to get? I'm 20 years old and have a credit score of 750. What other things to they take into consideration, and what would ballpark figures be for five, ten, and fifteen thousand dollar loans (as examples)?

Also, regarding my credit score, the credit report lists my own card which has always held a zero balance, but also a card I have from my parents (credit card, my name on card, their account, they pay it; used since high school for gas, food, etc). Their card holds a balance, is this affecting my score? Or not, since it's technically not my account?

Thanks for any info, advice, etc.

**ss~zoso~ss** · 02-16-2009, 11:19 AM

as far as the credit cards go, it doesnt matter who pays it, its only the person's name on the card who is affected credit wise, as long as you are making your minimum payments, I think it wont hurt or help your credit.

not 100% tho,

as far as the stock market goes, buy high, sell low

**rbob93** · 02-16-2009, 11:23 AM

Don't get financed through the dealer.....secure your own loan through your bank.

**Zboner** · 02-16-2009, 11:24 AM

yea I was about to say the same thing, get a loan from your bank.

**86 IROC-Z** · 02-16-2009, 11:27 AM

Originally Posted by rbob93

Don't get financed through the dealer.....secure your own loan through your bank.

Originally Posted by Zboner

yea I was about to say the same thing, get a loan from your bank.

I think my dad told me that one when I was 13... Don't even want to buy from a stealership, if possible.

**gwballin** · 02-16-2009, 11:37 AM

Originally Posted by 86 IROC-Z

When applying for an auto loan, what factors determine the rate you get and how much they allow you to get? I'm 20 years old and have a credit score of 750. What other things to they take into consideration, and what would ballpark figures be for five, ten, and fifteen thousand dollar loans (as examples)?

You have a reasonably good credit score, but I think the thing that is going to hurt you is credit history. Your history isn't long enough (I would imagine) to get a great rate. A couple of other factors will be length of employment and size of down payment.

In terms of what payments will be like you can set up an excel formula and play with the rate, term and principle to see what kind of payments you end up with. If you don't know how I'll post instructions.

**Tonik** · 02-16-2009, 02:40 PM

Originally Posted by ss~zoso~ss

as far as the stock market goes, buy high, sell low

You might make a little more money buying low and selling high. Just a thought.

**SouthernBornThriller** · 02-16-2009, 03:12 PM

Originally Posted by gwballin

You have a reasonably good credit score, but I think the thing that is going to hurt you is credit history. Your history isn't long enough (I would imagine) to get a great rate. A couple of other factors will be length of employment and size of down payment.

In terms of what payments will be like you can set up an excel formula and play with the rate, term and principle to see what kind of payments you end up with. If you don't know how I'll post instructions.

+2 on this one.

Will be 20 next month myself, and although I've bought (and paid off) one car already, and have a very good credit score, when I went to buy my T/A last summer off a dealer's used car lot I pretty much had to have my dad co-sign the loan for me. They wouldn't even run the numbers for me financing it myself.

Also, I bank through a Credit Union, and when I talked to them, they pretty much told me that with my length of credit history, they wouldn't loan me enough to buy as much as a candy bar from the snack machine without a co-signer.

Basically, the only way to avoid getting a "no gray hair tax" is to pay cash up front until you're at least 25.

**Zapper2003** · 02-16-2009, 06:01 PM

My first loan was over 4 years ago, 4900$ to buy my first Harley. I had my dad cosign the loan for me through td banknorth, i made all the payments, never late once, and paid it off in one lump sum when I sold it AFTER i bought my 2nd bike EXACTLY one year later, to the day. The 2nd bike was 12,999, and I had to have my dad cosign that loan through harley credit as well because it was denied due to 'lack of credit history'. Even though I had made my payments on time every time, it was still not showing. Now fast forward 3 years to may of 08, I bought my truck. 14,999. Again i was turned down for lack of credit history, however, (the dealership works with about 25 banks) they were able to get me financing on my own through TD Banknorth because of their history with me being financed through them in the past with a good history. I was able to finance the truck for 7.75%, which was okay at the time, I think.

**laserredgt** · 02-16-2009, 06:32 PM

Originally Posted by 86 IROC-Z

So, I'm thinking about getting a new car. I have wanted one ever since forever, but as I will soon have a steady income, I'm playing around with ideas of financing one.

When applying for an auto loan, what factors determine the rate you get and how much they allow you to get? I'm 20 years old and have a credit score of 750. What other things to they take into consideration, and what would ballpark figures be for five, ten, and fifteen thousand dollar loans (as examples)?

Also, regarding my credit score, the credit report lists my own card which has always held a zero balance, but also a card I have from my parents (credit card, my name on card, their account, they pay it; used since high school for gas, food, etc). Their card holds a balance, is this affecting my score? Or not, since it's technically not my account?

Thanks for any info, advice, etc.

I work at a credit union and here is how we do it...

1st we run your credit lets say 600-650 good 650-700 great
750-800+ excellent..

2nd just because you have an excellent credit score doesnt automatically get you financed. This is when job stability comes into play..most banks and C.U.'s will not finance you unless you have had at least 8 months on the job. this is just to insure that you have a less likely chance of you getting fired for no reason.

3rd debt to income ratio... a bank does not want to see anyone that makes $1500 a month getting a car thats going to be 700 a month without insurance. (most banks require full coverage on any automobile that is financd)

you say you have a credit card on your own...it usually doesnt help if you always have a 0 balance..at least pump gas with it and use it a little, that builds credit.

**86 IROC-Z** · 02-17-2009, 10:51 AM

Thanks for the advice guys

Originally Posted by gwballin

You have a reasonably good credit score, but I think the thing that is going to hurt you is credit history. Your history isn't long enough (I would imagine) to get a great rate. A couple of other factors will be length of employment and size of down payment.

In terms of what payments will be like you can set up an excel formula and play with the rate, term and principle to see what kind of payments you end up with. If you don't know how I'll post instructions.

Yeah not long at all. I'm planning a relatively large down payment (In comparison to the total vehicle cost). I played around on Excel and it wasn't as bad as I thought it would be, even at higher rates.

Originally Posted by SouthernBornThriller

+2 on this one.

Will be 20 next month myself, and although I've bought (and paid off) one car already, and have a very good credit score, when I went to buy my T/A last summer off a dealer's used car lot I pretty much had to have my dad co-sign the loan for me. They wouldn't even run the numbers for me financing it myself.

Also, I bank through a Credit Union, and when I talked to them, they pretty much told me that with my length of credit history, they wouldn't loan me enough to buy as much as a candy bar from the snack machine without a co-signer.

Basically, the only way to avoid getting a "no gray hair tax" is to pay cash up front until you're at least 25.

Thanks for the info, my dad won't have a problem co-signing anything for me (Providing I can obviously afford it / make payments).

Originally Posted by laserredgt

I work at a credit union and here is how we do it...

1st we run your credit lets say 600-650 good 650-700 great
750-800+ excellent..

2nd just because you have an excellent credit score doesnt automatically get you financed. This is when job stability comes into play..most banks and C.U.'s will not finance you unless you have had at least 8 months on the job. this is just to insure that you have a less likely chance of you getting fired for no reason.

3rd debt to income ratio... a bank does not want to see anyone that makes $1500 a month getting a car thats going to be 700 a month without insurance. (most banks require full coverage on any automobile that is financd)

you say you have a credit card on your own...it usually doesnt help if you always have a 0 balance..at least pump gas with it and use it a little, that builds credit.

Sorry, when I meant zero balance, I meant that I never let a balance carry over month to month. I'm currently using it to build credit.

Will having a co-signer remove the need for that amount of time at a job? Or is it generally required regardless?

About the debt to income ratio: My rent and food are already covered each month, any income would primarily go towards the car payment, does that make a difference to the bank?

**JHayesLS1** · 02-17-2009, 11:12 AM

I was 19 and had a loan through my credit union. My WS6 cost $16500 and I put $5k down. I had 1 credit card I just got about 6 months prior to applying for the loan. Here is the thing though I've worked for the same place since I was 16 though so I had 3 years on the job and big down payment and I got the loan. For 9.5% mind you but I was approved.

**ls1blackbeauty98** · 02-17-2009, 11:55 AM

number one, i highly doubt that u are 20 years old with a 750 score. to get that kind of score u not only need to pay your bills on time ect..., but u also need a HISTORY of credit, meaning u've gone a few years (more then the prolly....... maybe? 2 years you have), and over those years you had credit cards that u managed, taken out loans that you paid back completely and every month on time, the young kids that say that kind of shit crack me up. i have financed vehicles for 20 year olds who come in saying they have a 750 credit score, havent met one who was right yet. anyway... with that being said.

The year of the car is usually what determines the rate/ how long u can take the loan out. If its over 7 years old you usually cant take the loan out for more then 4 years (in PA, im not sure about other states) the older the car is the more interest u will be paying, thats basically about it.

**JHayesLS1** · 02-17-2009, 11:59 AM

Yeah I'm 21 always paid on time and everything and my score hasn't hit the 700's yet. This year I'm hoping it will. Just don't get anxious when looking for a loan because a car dealer will run your credit through 30 banks. If you don't get approved you are looking at -7 pts each time or something like that.

**ls1blackbeauty98** · 02-17-2009, 12:01 PM

Originally Posted by 86 IROC-Z

Thanks for the advice guys

Yeah not long at all. I'm planning a relatively large down payment (In comparison to the total vehicle cost). I played around on Excel and it wasn't as bad as I thought it would be, even at higher rates.

Thanks for the info, my dad won't have a problem co-signing anything for me (Providing I can obviously afford it / make payments).

Sorry, when I meant zero balance, I meant that I never let a balance carry over month to month. I'm currently using it to build credit.

Will having a co-signer remove the need for that amount of time at a job? Or is it generally required regardless?

About the debt to income ratio: My rent and food are already covered each month, any income would primarily go towards the car payment, does that make a difference to the bank?

debt to income doesnt include food/other expenses (like a haircut lol) sweetheart

it includes ur monthly bills, rent...credit card payments, loan payments ect.. having a low one is very good. my debt to income is 12%, which is considered excellent, if that helps. search for a debt/income calculator online if ure worried about that. i honestly dont think ure going to need to worry about that for a car, because there is calateral (sp??) with the loan, usually they look at debt to income on like a personal loan where they cant take any sellable property if u dont pay.

u might want to think about a co-signer, thats usually the only way i could finance 20 year olds with "750 credit scores"

sorry thats just cute

i just re-read your post, saying u have two things on ur credit, no way u have that kinda score. id ask ur mom or dad to go with u, ure going to need a co-signer im pretty sure

lets say u have a 15k loan @ 8% (high because its used) you take this loan out for 5 years your payments will be around 270 a month. u wanted an example i gave u one

**86 IROC-Z** · 02-17-2009, 12:20 PM

Originally Posted by ls1blackbeauty98

(in PA,

G, not P. Thanks though.

Originally Posted by ls1blackbeauty98

(like a haircut lol)

That post was made in jest. I can afford $20 to not look like a tool.

Originally Posted by ls1blackbeauty98

id ask ur mom or dad to go with u,

I'm not going anywhere.

Originally Posted by ls1blackbeauty98

lets say u have a 15k loan @ 8% (high because its used) you take this loan out for 5 years your payments will be around 270 a month. u wanted an example i gave u one

Thanks, but I already know how to use a financial calculator.

**Hi-Po** · 02-17-2009, 12:32 PM

Shit, Im 22 And I KNOW I have a 740+ credit score. Dont say it isn't possible. Slightly ignorant, even for someone who just showed how to use a calculator to compound an interest rate

When I was looking at buying a house in shit hole Michigan I got approved for 170,000. They run your credit Im gonna guess. I bet they look pretty hard. IIRC it was 758.

**86 IROC-Z** · 02-17-2009, 12:35 PM

Originally Posted by Hi-Po

Slightly ignorant, even for someone who just showed how to use a calculator to compound an interest rate

Who is that directed at?

**Hi-Po** · 02-17-2009, 12:41 PM

Originally Posted by 86 IROC-Z

Who is that directed at?

Not you.

**JonB** · 02-17-2009, 12:48 PM

Did't read everyones replys but you want to use your credit card every once and a while. It's not a bad thing to use it just don't over use it or live of credit/money you don't have. Try like once a month, use it then pay it off. I will use mine and as soon as it shows up on my account online(which is usually the day I use it) I pay it off. This will help your credit score and your history.

I had a similair issue when I got my car at 19. Had a great credit score but did not have long enough of a history to get a loan on my own. Well I'm sure I could have if I really looke around but it probably been some rediculous rate. So my dad cosigned on my loan.