how do bank loans work?

[HybridSquirrel]

Originally posted by: GuitarDaddy

Originally posted by: HybridSquirrel

cant even get a loan if you put up the car for collateral?

Nope, not on that alone. Thats a requirement of the loan even for those with established credit. But you will need more, either a sizeable down payment or a co-signer.

Think about it from the banks perspective. If they loan on an auto with the only security being the car itself and you make payments for a few months then stop paying. They have to go through the repo process (which costs money), then they have to sell the car (which costs money) and they aren't guaranteed to get what they loaned you for it when it sells due to depreciation/misuse/damage and general market conditions(more money). And banks don't have the time or resources to try and get top market value for repo'd cars, the usually sell them to wholesalers/dealers at less than the market value. Banks aren't in business to take those kind of risks.

And you may wonder why I'm explaining in such detail
1. I'm a Finance/Accounting pro thats been in the business for 25+yrs
2. Grew up in a banking family, dad worked his way from loan officer > senior LO > VP > president > CEO > retired
3. Got kids myself and been through this speach and process with them

yeah my dad is vp treasury group Bank of Hawaii chief economist blah and he lectures me all the time about this stuff. the bank has billions of dollars. im only taking maybe 7k with interest. whats that to a big bank?

 

[Kelvrick]

Originally posted by: HybridSquirrel

Originally posted by: GuitarDaddy

Originally posted by: HybridSquirrel

cant even get a loan if you put up the car for collateral?

Nope, not on that alone. Thats a requirement of the loan even for those with established credit. But you will need more, either a sizeable down payment or a co-signer.

Think about it from the banks perspective. If they loan on an auto with the only security being the car itself and you make payments for a few months then stop paying. They have to go through the repo process (which costs money), then they have to sell the car (which costs money) and they aren't guaranteed to get what they loaned you for it when it sells due to depreciation/misuse/damage and general market conditions(more money). And banks don't have the time or resources to try and get top market value for repo'd cars, the usually sell them to wholesalers/dealers at less than the market value. Banks aren't in business to take those kind of risks.

And you may wonder why I'm explaining in such detail
1. I'm a Finance/Accounting pro thats been in the business for 25+yrs
2. Grew up in a banking family, dad worked his way from loan officer > senior LO > VP > president > CEO > retired
3. Got kids myself and been through this speach and process with them

yeah my dad is vp treasury group Bank of Hawaii chief economist blah and he lectures me all the time about this stuff. the bank has billions of dollars. im only taking maybe 7k with interest. whats that to a big bank?

Maybe you should listen to your dad a little more and stop being such a dumbass.

Whats 7k with interest to such a big bank on one loan right? What about the countless other loans they have for a couple grand, they're not important because they're not in the millions? You can have personal one on one advice about this stuff but instead resort to a bunch of random people on a COMPUTER forum?

 

[Hannover]

Originally posted by: HybridSquirrel

Originally posted by: GuitarDaddy

Originally posted by: HybridSquirrel

cant even get a loan if you put up the car for collateral?

Nope, not on that alone. Thats a requirement of the loan even for those with established credit. But you will need more, either a sizeable down payment or a co-signer.

Think about it from the banks perspective. If they loan on an auto with the only security being the car itself and you make payments for a few months then stop paying. They have to go through the repo process (which costs money), then they have to sell the car (which costs money) and they aren't guaranteed to get what they loaned you for it when it sells due to depreciation/misuse/damage and general market conditions(more money). And banks don't have the time or resources to try and get top market value for repo'd cars, the usually sell them to wholesalers/dealers at less than the market value. Banks aren't in business to take those kind of risks.

And you may wonder why I'm explaining in such detail
1. I'm a Finance/Accounting pro thats been in the business for 25+yrs
2. Grew up in a banking family, dad worked his way from loan officer > senior LO > VP > president > CEO > retired
3. Got kids myself and been through this speach and process with them

yeah my dad is vp treasury group Bank of Hawaii chief economist blah and he lectures me all the time about this stuff. the bank has billions of dollars. im only taking maybe 7k with interest. whats that to a big bank?

If you can't recognize why the bank doesn't want to give you money, maybe you're not ready to be borrowing from a large institution. Part of being responsible with your debt is recognizing your own risk factors, acknowledging them and then trying to improve them. The "GIMME, GIMME, GIMME... YOU'VE GOT LOTS OF MONEY, GIVE ME SOME" attitude is only going to get you in trouble.

 

[GuitarDaddy]

Originally posted by: HybridSquirrel

yeah my dad is vp treasury group Bank of Hawaii chief economist blah and he lectures me all the time about this stuff. the bank has billions of dollars. im only taking maybe 7k with interest. whats that to a big bank?

What did you say?😕

All I heard was "waaa waaa waaa blah blah blah waaa waaa"🙂