Vehicle Loan Advice
01-27-2009, 09:29 PM
#24
Teching In
Join Date: Sep 2005
Location: San Diego
Posts: 19
Likes: 0
Received 0 Likes
on
0 Posts
Part of my job is to talk to banks all day to get auto loans approved. 6 months ago, it was easy to do out-of-state deals. Not any more, banks are tightening up.
There are banks out there that will finance a car more than 10 years old but your interest rate will shoot up. The older the car and the more miles it has, the bank takes a higher risk on financing it due to depreciation. Wells Fargo Auto use to do this kind of stuff but they have since folded up and become a part of Wachovia Dealer Services (vice versa).
Banks, Credit Unions and the like, follow what they call a LTV (Loan to Value Ratio) and then they compare this against your DTIR (Debt to Income Ratio). If it all makes sense to them they will finance it. YOU DON'T HAVE TO HAVE PERFECT CREDIT TO GET THE BEST RATES. If you have enough substantial "credit history" with enough good standing/paid accounts then you can find the best rates.
As your debt to income ratio closes (say you have a 10,000 dollar limit and have used 9600 dollars of that available credit) your score will drop. Allot of people are under the impression that banks WANT them to use all that money. It is actually the opposite. The closer you are to a 0 balance on your revolving/installment lines of credit, the higher your score will go.
So in a scenario like this, you can have 20 years of perfect credit history with lines of credit in excellent standing and be a 530 credit score due to your DTIR. THIS WILL NOT AFFECT YOUR RATE. At least not enough to warrant a big increase in interest.
Now for someone that goes out and gets a credit card for the first time and uses it for a year in good standing, that person will have a 700 plus credit score but could still be looking at auto rates in the 15 to 20 percent range due to their DEPTH OF CREDIT. Sure, the score says it all, but that person doesn't have enough credit to warrant such a good rate. THIS WILL AFFECT YOUR RATE.
If you have any questions regarding trying to find a loan, PM for my phone number and I will hook you up with a couple banks to talk to. They will get you done.
There are banks out there that will finance a car more than 10 years old but your interest rate will shoot up. The older the car and the more miles it has, the bank takes a higher risk on financing it due to depreciation. Wells Fargo Auto use to do this kind of stuff but they have since folded up and become a part of Wachovia Dealer Services (vice versa).
Banks, Credit Unions and the like, follow what they call a LTV (Loan to Value Ratio) and then they compare this against your DTIR (Debt to Income Ratio). If it all makes sense to them they will finance it. YOU DON'T HAVE TO HAVE PERFECT CREDIT TO GET THE BEST RATES. If you have enough substantial "credit history" with enough good standing/paid accounts then you can find the best rates.
As your debt to income ratio closes (say you have a 10,000 dollar limit and have used 9600 dollars of that available credit) your score will drop. Allot of people are under the impression that banks WANT them to use all that money. It is actually the opposite. The closer you are to a 0 balance on your revolving/installment lines of credit, the higher your score will go.
So in a scenario like this, you can have 20 years of perfect credit history with lines of credit in excellent standing and be a 530 credit score due to your DTIR. THIS WILL NOT AFFECT YOUR RATE. At least not enough to warrant a big increase in interest.
Now for someone that goes out and gets a credit card for the first time and uses it for a year in good standing, that person will have a 700 plus credit score but could still be looking at auto rates in the 15 to 20 percent range due to their DEPTH OF CREDIT. Sure, the score says it all, but that person doesn't have enough credit to warrant such a good rate. THIS WILL AFFECT YOUR RATE.
If you have any questions regarding trying to find a loan, PM for my phone number and I will hook you up with a couple banks to talk to. They will get you done.
