'Personal' Loan with bad credit?

[Alienwho]

Second and Third jobs for the both of you. Save up cash, sell cars, buy beaters.

I know you wanted to "Build up your credit" but next time you want to chase imaginary numbers that some company randomly pulls out of their ass, you could buy a cheaper car and have the same effect. Or better yet, don't worry so much about it.

I agree. Building up credit is not a way to justify buying a new car. If you want a new car just to have a new car own up to it. Don't give the excuse of wanting to build your credit. You declared bankruptcy, your credit is hosed for 7 years no matter how many new cars you buy.

I have never purchased a new car. In fact I have never even had a car payment. I have 800 credit score (I just bought a house two months ago). I do have 10 years of credit history, however.

Want to hear something screwed up? My wife had no credit before she met me. We got married a 3 years ago and after 1 year I got her her own credit card in her name only so she could build up her own credit. So at this point she has two years of credit history with a dinky little credit card with a $500 limit that she buys gas with once per month and she has a better credit score than I do!

To build your credit all you need to do is pay your credit card bills. That's it. Throw in a cell phone bill to maybe add a little oomph. After declaring BK though you should accept the fact that your credit score is tanked for the better part of the decade so don't make any decisions based on improving the score.

 

[DigitalCancer]

Way to keep it civil. I've met OP in person, in real life, and he's a good guy who doesn't deserve that kinda bullshit flung his way.

DC, it's time to make some hard decisions and put in some hard hours. Fire sale your cars, your stuff, your everything. You can't afford what you currently have. You gotta make some really tough choices about how much your things are really costing you. You don't need to answer this in the thread, but were finances an issue in the first divorce? Do you want them to be an issue in the second divorce?

As others have said, get rid of the two new cars and get two runners. Get out from under that debt ASAP. How about electronics? Computers? Books? Furniture? What else? Selling shit you don't need is a great way to scrape up cash - and you have to make hard decisions about what's necessary (two LCDs = unnecessary).

What about your personal monthly finances? How much do you spend eating out? Movies? Golfing or whatever other recreation? Where can you make cuts? Groceries - do you buy name brands or generics? How much junk that you don't need do you buy? Have you sat down with your wife and written down where all your money is going?

Get a second job. Even if it's 10 hours/week making $10/hour. That's $400/month. Yeah, you'll be tired, but be glad that's the extent of your payment for mistaken decisions.

Purchasing two $20k+ car was not your only option for building credit. You could have gotten used for $10k or less and had it financed. Heck, you could have gotten $15k cars. If you can't learn from your mistakes, you'll just repeat them in a few years. Accept them as mistakes and learn from them in the future.

My advice would be to pull down a 2nd job. Most of the loss in value of your car occurs at the beginning of it's life. You are also (probably) a ways away from the normal big-ticket car repair times, so there shouldn't be a major repair bill in the near-term. Trading down will just leave you with a lower quality car + 5K or whatever in debt. It'll suck in the short term, but I think it will be better for you in the long term.

Thanks for that!

I don't have much to sell, one TV I bought for $200 and the other I might get 4-600 out of? Other than that...I don't have anything (I've tried to live cheaply lately). We were eating out quite a bit (my wife's fault) but we're cutting that out, I've finally gotten her on track so that'll be an extra $400-500/month (yes..you read that right).

I've looked into a couple of @home jobs that pay $8-10hrs that I could possibly do part-time but I'd need to buy a laptop as we only have one to share right now.

It's sad that we don't have a whole lot but we've kinda 'squandered' our money since we've been together...we bring in roughly $68k right now...not happy of where I've been but, I'm trying to correct it now.

My first divorce was due to HER cheating...had nothing to do with money. ^_^ She was crazy as hell to so that didn't help any. She actually cheated on me with some dude from her psych session.

just to be redundant you should be driving $4k cars not $20k cars.

Agreed!

 

[Gigantopithecus]

we bring in roughly $68k right now

Jeez dude, married couple (no kids IIRC, yes?) pulling in nearly $70k/year in freakin' Portage should be living it up, not worrying about making ends meet! Time to start crunching numbers!

 

[Alienwho]

way to make assumptions. he asked a question. just answer it. No need to give him a speech and be a dick.

Feed a man a fish vs teach a man to fish. I try not to be a dick on the forum very often but I'm just telling it like it is. One of the hard things about asking for financial advice on forums is sifting through the crap advice for the good advice. I might be a dick about it but at least i'm not giving bad advice.

Why anyone would take advice from someone who believes a 12% interest rate on a brand new car after declaring bankruptcy is not such a bad deal is beyond me.

 

[Aikouka]

Agreed!

One thing I think you may have ignored when purchasing the new car is your debt to income ratio. While you are showing that you are making your payments, which is good, they're going to see that you've got nearly 60% of your gross income tied up in loans.

 

[Elbryn]

i dont think you're in a bad situation, just need to get the lifestyle aspects into an acceptable limit and go on from there.

even if you did nothing but pay down the loan with an extra 400 a month. in two-three years the car would be totally paid off. roll half that cash into your malibu($450+200), car is also paid off in 2-3 years. now you have extra cash flow to be banked. this is the longest route of course but doable.

other option is bank the 400-500 a month into the old car loan. after a year, sell the car in the private market closer to appraised value and clear it off your books. same timeline as getting a 5k loan. turn the 400-500 + 450 car payment into the malibu and clear it off in a year or two. drive the beater. now you're back on solid ground. start saving for things like home/retirement.

 

[highland145]

Why anyone would take advice from someone who believes a 12% interest rate on a brand new car after declaring bankruptcy is not such a bad deal is beyond me.

So what rate should he have gotten with a fresh bankruptcy?

 

[Alienwho]

So what rate should he have gotten with a fresh bankruptcy?

No rate. Take the bus, save up $4k, buy a beater.

 

[highland145]

No rate. Take the bus, save up $4k, buy a beater.

That, I agree with.

Typical Buy here/Pay here, around here, is 28% on used cars. And they usually don't report so it doesn't help your credit either.

 

[Tsavo]

You are stuck for now. You won't get a loan and it'll take a year for you to scrape up the extra $5k, and by that time you'll owe less on the car (that will also be worth less).

I'm of the notion that you should just hold on to the vehicle till the wheels fall off. That's what I do, and outside of finding a Ferrari 250 GTO on CL for $4300, that's the only way to get anything approaching value out of a new car purchase.

Selling the car and taking a hit is not optimal, but keep in mind that swapping out a new car for a used car might not save you as much as you'd think unless you are willing to drive utter garbage. Think about $5k for something that approaches being driveworthy.

Look up the yearly values of your car to get an idea of what it'll be worth a year from now vs what you owe on it...this will make clear what your position will be.

As you've already clued in, you can find extra money by keeping track of all your expenses and expenditures and finding extra saving money by cutting out excess spending. You could easily dig up $5k just by cutting out the excess for 6 months of living frugally.

 

[OILFIELDTRASH]

Time for a second job. You got yourself into this mess and you'll be the only one who can get yourself out. With the extra income you could pay down the balance owed on the car then when you've got the balance down enough you could get it refinanced at a better interest rate. Since the balance will be lower on top of a better interest rate you'll be saving a lot of cash.

Sorry but no bank is going to lend you a dime without collateral. Period. As far as I know only credit cards and cash now places do unsecured loans.

 

[DigitalCancer]

Time for a second job. You got yourself into this mess and you'll be the only one who can get yourself out. With the extra income you could pay down the balance owed on the car then when you've got the balance down enough you could get it refinanced at a better interest rate. Since the balance will be lower on top of a better interest rate you'll be saving a lot of cash.

Sorry but no bank is going to lend you a dime without collateral. Period. As far as I know only credit cards and cash now places do unsecured loans.

Yea...it might be better for me to just suck it up and cut a few corners (not sure how I can do that anymore than I am at the moment) and pay the extra amount on the balance to get it down to $13k...I think it'll be at the depreciation level still so I can still get rid of it free and clear.

I'm looking into some PT $8/hr jobs as well so maybe that'll help out if I can get 20hrs/week that'll land me an extra $500/month at least.

Question...kinda off topic...my wife has a 401k, can't we borrow against that as well? She only has like $3-4k in it I think, I have no idea how investments works as of yet since I've never had a 401 myself. I plan on investing my money in some RothIRA's once I get straightened out.

 

[JTsyo]

Yea...it might be better for me to just suck it up and cut a few corners (not sure how I can do that anymore than I am at the moment) and pay the extra amount on the balance to get it down to $13k...I think it'll be at the depreciation level still so I can still get rid of it free and clear.

I'm looking into some PT $8/hr jobs as well so maybe that'll help out if I can get 20hrs/week that'll land me an extra $500/month at least.

Question...kinda off topic...my wife has a 401k, can't we borrow against that as well? She only has like $3-4k in it I think, I have no idea how investments works as of yet since I've never had a 401 myself. I plan on investing my money in some RothIRA's once I get straightened out.

I wouldn't pull from the 401K at this point unless you're truly desperate (you're not). The Stocks will probably go up quick in the next 2 years and she'll miss out on that growth.

What are you other expenses like? Rent? Student loans? At 68K I would think you could get $750-$1K/mth without much sacrifice. Say about 3.5K/mth after taxes, where does 3K go that you can only save $500?

 

[DigitalCancer]

I wouldn't pull from the 401K at this point unless you're truly desperate (you're not). The Stocks will probably go up quick in the next 2 years and she'll miss out on that growth.

What are you other expenses like? Rent? Student loans? At 68K I would think you could get $750-$1K/mth without much sacrifice. Say about 3.5K/mth after taxes, where does 3K go that you can only save $500?

Our setup goes like this (we're room-mating with her sister/fiance' which kinda sucks since I'm the responsible one we end up having to 'foot' the bills for her sister...anyway):

Gross for both: $4100

Rent: $465 ($930)
Internet: $35 ($70)(we just switched this last month, bill was $200+)
Electric: $80 ($150-160)
Insurance: $170
OTA cable: free
Car 1: $455
Car 2: $450
Cell: $120
SallieMae (my student loan): $160
GreatLakes (wife's student loan): $110
Docs (almost paid off): $40
$2085

Gas: $120
Food: $200
Misc: $200

$2600

So...according to my numbers, we should have somewhere around $1200/month left over with our income...

Please keep in mind that we just RECENTLY moved last month and so we're paying less than what we were (was around $3200 total) due to her sister moving in with us so we're paying (half) on the Rent/utilities/groceries now, but hasn't quite taken effect on the money situation.

 

[Elbryn]

pulling from a 401k is not a good idea. you're going to need it in the future and you'll get taxed at your current marginal tax rate with a 10% penalty. what you get out is going to cost you through the nose.

if you really are at a +1.2k a month, you dont even need a second job. just pump the excess into the loan until you're at the value you want. the second job would certainly help but you can get the car loan to 13.5 in say half a year. from there you should jump from 1.2 a month to 1.65k excess. now you're solidly in the black and can turn up the roth ira, emergency fund, etc..

if you want another corner to cut, you can drop cell phone from 120/month to prepaid over pageplus (voice, no text/data) for $80/2000 minutes. can put smart phones on the plan also , make sure you turn mobile data off though. we dropped from 70/month to $20/month in this way.

 

[TwiceOver]

Our setup goes like this ...

Gas: $120
Food: $200

...but hasn't quite taken effect on the money situation.

Earlier you said you drive 20 minutes to work and your wife 45. Is that one way? If so there's no way you are driving 120+ miles per day on $120 in gas per month. Even if you owned a compact car or hybrid, I don't think you could pull that off.

Also, $200/mo for food? Even when my wife and I didn't have our son we spent nearly that per WEEK in food/household goods.

I bet you are closer to $300 Gas and $500+ food.

 

[Aikouka]

Gross for both: $4100

...

$2600

So...according to my numbers, we should have somewhere around $1200/month left over with our income...

I think you forgot Uncle Sam's cut.

 

[JTsyo]

Our setup goes like this (we're room-mating with her sister/fiance' which kinda sucks since I'm the responsible one we end up having to 'foot' the bills for her sister...anyway):

So you're spending $465 a month extra for her sister's rent or is that just double for you and the wife?

 

[DigitalCancer]

pulling from a 401k is not a good idea. you're going to need it in the future and you'll get taxed at your current marginal tax rate with a 10% penalty. what you get out is going to cost you through the nose.

if you really are at a +1.2k a month, you dont even need a second job. just pump the excess into the loan until you're at the value you want. the second job would certainly help but you can get the car loan to 13.5 in say half a year. from there you should jump from 1.2 a month to 1.65k excess. now you're solidly in the black and can turn up the roth ira, emergency fund, etc..

if you want another corner to cut, you can drop cell phone from 120/month to prepaid over pageplus (voice, no text/data) for $80/2000 minutes. can put smart phones on the plan also , make sure you turn mobile data off though. we dropped from 70/month to $20/month in this way.

Yea, the cell that we have is $60/month unlimited talked/data/text. So I think we're as cheap as we're going to get (I need data for work due to receiving emails).

 

[DigitalCancer]

So you're spending $465 a month extra for her sister's rent or is that just double for you and the wife?

No, the ()'s is what the rent actually is...but...we only pay $465. Thing is...I have to account for having it all in case they're 'not quite there' some months...grrr I hate having room-mates already. They're just irresponsible, but it's my wife's twin, saying no doesn't bode well for me. ^_^

And yes...gas is under-estimated right now most likely b/c my wife is out of school right now (teacher)...It's probably closer to $220-250/month in gas for both of us driving to work/back and then our usual running around. Sorry I didn't do a good job calculating that...it was a quickie budget of what I can remember off hand w/o going into too much detail.

 

[SunnyD]

Funny, I bought a house and now lenders are falling over themselves to give me money. Personal loan offers out the ass, usually 2 a week in the mail. All this can be yours too with a 630 credit score.

 

[Aikouka]

Funny, I bought a house and now lenders are falling over themselves to give me money. Personal loan offers out the ass, usually 2 a week in the mail. All this can be yours too with a 630 credit score.

I'm guessing it's because you have collateral now (your house)?

EDIT:

Although, I'm renting and I'll get those silly things sometimes. I think the whole "no CC/bank spam" finally kicked in, because I've stopped getting them in the mail now.

 

[DigitalCancer]

Funny, I bought a house and now lenders are falling over themselves to give me money. Personal loan offers out the ass, usually 2 a week in the mail. All this can be yours too with a 630 credit score.

hehe..yea, b/c you own a house now.

How about you just fill one out for me and then I can pay it back??? ^_^

 

[SunnyD]

hehe..yea, b/c you own a house now.

How about you just fill one out for me and then I can pay it back??? ^_^

To be honest, I'd help you out if I could. I'm still working on cleaning up my own credit from 15 years of mistakes.

 

[Texashiker]

So...my credit score right now is around 640, but I have (2) car loans...one for $21k and the other for $18k <snip>

No investments or anything as of yet. Help? Anyone want to co-sign for me!!?? ^_^

DigitalCancer, I read through this thread a couple of times before I decided to post. I do not mean to attack you or insult you in any way, I just want to be honest. I do not know you, but in real life I bet you're a nice guy, just as one member has already posted.

What I see you doing is living at the edge of your means, instead of inside your means.

Personally, what I would do is keep the car until your no longer underwater, and then buy a car that you can afford to just about pay cash for. Whether that car or truck cost $3,000, or even $4,000, save your money and finance as little as possible.

I have made lots of post in this forum about living without credit, and your situation is one of the reasons why I live well within my means. Forget the new cars, forget buying the best of whatever, save your money and pay cash.