I deperately need a new car and have no down payment. My credit score is 580 and I have been turned down by the majority of banks, except a few that were thru dealerships. Also, one lender (not a bank) who specialized in bad credit loans offered me a loan of k my payments would have been 0/month and the term 12 months! So needless to say I had to turn that down. I have worked hard on getting my credit fixed up, but I’ve done almost all I can do for the time being and nothing is instantaneous when it comes to my score. Right now I am waiting to hear back from a large dealership who transferred my application to their bad credit loans department and they sounded like it may be promising, but I know that the interest rate and terms may not be great. The car salesman told me that I might consider having a co-signer – but awhile back a loan officer told me that he thought co-signers were more for people who dont have enough credit, not those who have bad credit. By what I have heard, my score of 580 definately qualifies me for a bad credit loan, but I could still qualify for a better loan, but either way it would be high interest rates. What should I do? I have considered waiting, but I need a new car ASAP.
the loans I got approved for thru dealerships so far were not enough to buy a car…
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Wed, Aug 25, 2010
August 25th, 2010 at 9:49 am
Ive been in the credit business for five years now and work at a bank currently, and yes a cosigner will always help! Its advisable that they have excellent credit and low ratios!
August 25th, 2010 at 9:49 am
Yes, you should look in to a co-signor, preferrably someone that has a higher credit score and makes more money. Becasue currently you are a "risk" to them. SO they need someone to kind of pick up where you are lacking to level out the loan. As a credit re-builder bad auto loan will definitely have much higher interest rates. If that is a risk you are willing to take, go ahead and make sure you make the payments on time every month, then try to refinance in about six months.
My next question is, what kind of car are you trying to buy. Sometimes we can not get the kind of car we want you might have to settle for something small and dependable to help you get established and try again in about a year. I have to have a Honda a year and a half before I was able to get my Tahoe. So be patient and try smaller cars and dealerships that do in-house financing instead of the little people.
Another solution, you should also try to establish an account with a credit union and see if you can get pre-approved then you will know what your budget is, before you continue looking.
As for a down payment, see if they will hold a post dated check for 30 days, a $500 down payment is better than nothing
GOOD LUCK!
August 25th, 2010 at 9:49 am
Auto finance is what I do for a living and a co-signer could be a great help to your efforts in buying a car.
A lot of credit unions will base their interest rate on the person with the best score alone so it’s possible for you to get a very good rate if your co-signer has good credit.
The best thing about co-signed loans is when someone looks at your credit in the future the only thing that will show is either a "J" for joint or a "C" for co-sign no one will know who is the primary and who is the secondary signer.
As long as you pay as agreed this will help both peoples credit, conversely if you pay late it will hurt both peoples credit.
Good luck.
September 3rd, 2010 at 6:51 pm
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