YACT: What type of car loan should I expect?

[Red]

When my Honduh sells in the next 6 months or so, I will need to get a car loan. I am 21 years old with a credit score in the 720ish range. I clear about $900-1000 a month, live with parents. With zero down, and at my bank or local credit union, what type of car loan can I expect? Would $8,000 over 48 months @ 10% with zero down be a reasonable loan? Honda ALLLMOST approved me for 4.9% @ $346/month for 60 months when I was 19 but they said my income (same as now) was the only factor that forced me to get a co-signer...they said my credit was mature enough and good enough to get approved but the amount of money was not. Ever since then I've been scared to get another car loan on my own once the Honda sells.

If worse comes to worse, and I find a car I really like, I could pull 2,000 or 3,000 off a low interest credit card, put that as a down payment at the local credit union on a $8,000 car loan and then I could probably be approved, right? Thoughts please.

 

[Red]

Maybe the morning crowd can help. Bump.

 

[Doggiedog]

10%? Cripes!! That is really high.

 

[StageLeft]

Yeah that low interest credit card idea would help if you had to. That rate probably is ok. As you know the older a car gets the tougher the loans are for it. Credit unions are the best bet, but as a car gets to a certain age it becomes more and more costly to borrow money for it. Feel free to shop around with rates, because you have a good credit score.

As an aside when I first bought a car in the US I had no credit, but I did have an MBNA credit card with a limit of 2500 I'd managed to get. Since I had no cash and no credit I cash advanced $2300 on it and bought a car with a cashier's check. It turned out to be a great move because I had the card paid off quickly and the car has been great

 

[PeeluckyDuckee]

lol, you bought a car on a credit card, that must be a first But yeah, with low interest APR CCs, it is a smart move.

I'm around the same situation as Redhotjrm, except I'm 24 and clear slightly more. Fixed rate financing, a couple of banks I've been to are asking 9.5% and 12%. At my own bank, I'm able to get variable prime+1%. Have a credit line with the same rate. And just applied for a low intro rate cc as well so I can save on interest cost while I cut down the cc debt.

 

[TheAudit]

I think you should be able to get a loan with a rate that is lower than 10%. That's a bit high.

 

[vi edit]

Depends on the age and milage of the car. The older and higher milage, the higher the interest rate.

 

[StageLeft]

Don't forget also that a cash advance on your CC is going to incur their ~3% surcharge, so even with a low rate you may be paying $30 for every $1000 that you borrow

 

[Red]

Yeah, 3%. I bought that 85 Celica, had to cash advance $1500 @ 15% with 3% surchage. But the car is selling for $2000 so it makes short use of that debt =)

 

[Siddhartha]

What kind of car are you looking for?

I just got an Acura with a 2.9% loan from Honda.

My credit union quoted a rate of 6.5%

 

[StageLeft]

Originally posted by: Dr Smooth
What kind of car are you looking for?

I just got an Acura with a 2.9% loan from Honda.

My credit union quoted a rate of 6.5%

He's looking for used, so he won't be able to get a loan from the seller, which is generally the best idea if possible (like you did).