What do they look for when giving a loan?
10-26-2006, 09:39 AM
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What do they look for when giving a loan? I didn't really make all that much laster year, but have been able to put away quite a bit of money in the bank this year. When getting an auto loan, are they looking for what you made last year, what you currently have in the bank or what? If they base it off of what was made last year, I am sure I will be unable to get the car I want but I have enough in the bank to purchase the car outright (though I would never dream of doing so!) Any ideas?
10-26-2006, 11:18 AM
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Most financial institutions will go off stated income (you dont have to provide documentation to prove your income ie tax returns) provided you have not been self employed for less than 2 years. They also look at past debt obligations and if you were ever delinquent on any of them. Also its a plus if all your reports on your credit file arent revolving debt like credit cards. They like to see that you have had a fixed payment and were able to pay it for an extended period of time. Also they like for you to have 2 years employment at your current employer and 2 years at your current residence. Thats not to say that if you lack any of these that you will get declined, these are just things that I have picked up working in the industry. There is also sub-prime lending for cars. Basically most people can get a car loan through one lender or another, your interest rate may be higher though.
If your interest rate you do find is too high, you could always use the money you have in the bank as collateral for the loan. You put the money in a savings account or cd and a hold is placed on the money until the loan is satisfied. Either route, you earn interest which effectively lowers the interest rate you are paying on the loan.
If your interest rate you do find is too high, you could always use the money you have in the bank as collateral for the loan. You put the money in a savings account or cd and a hold is placed on the money until the loan is satisfied. Either route, you earn interest which effectively lowers the interest rate you are paying on the loan.
Last edited by TEX02SS; 10-26-2006 at 11:45 AM.
10-26-2006, 11:39 AM
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It is all based on credit score. I bought my Corvette and did not provide them with any income documentation. I gave them my insurance and they verified my employment. Done deal!!
10-26-2006, 11:58 AM
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I got approved, but it seems high - it is 9.45% for a person to person auto loan @ 20k 60 months. If I were to switch to a new dealer loan it'd be 6.85%
Last edited by nomorews6; 10-26-2006 at 01:34 PM.