What are my chances on a car loan?

I'm 18. I've had a VISA credit card from my State Farm Insurance, I got without a co-signer, for 6 months and have been paying it not only every month, but every 2 weeks(I pay half of the balance every two weeks then have a 0 balance at the end of the month,then start using it again. I've never had to pay interest because I pay way more than the minimum balance). They raised my credit limit in the first 3 months from $500 to $1,000. I also pay a $72.91 phone bill and a $87.88 insurance bill. Total, my bills a month average to about $500 - $600. I get paid $1,300 a month after taxes. I live at home and don't have to pay rent or anything. What are my chances of getting a $20,000 car loan from my CREDIT UNION without a co-signer? If that doesn't work should I apply for a loan through State Farm(they already do my credit card and insurance)?

good job sounds like you got a plan that is the best 18 y/oQ's I've seen yet you'll get it be proud of your accomplishments

Hmmm about the credit unions...If you have fair enough credit to get approved for a car loan from a traditional bank or dealership, they will approve you and generally give you a lower interest rate than most banks(since a lot of them are nonprofit, unlike for-profit banks). But sometimes if you do not have enough credit, it can still be a little hard to get approved, even with a credit union.

A $20,000 loan is a big loan amount in comparison to your $325/week income and your $600/mo. bills. And although you do have a credit card that you pay on time and in full, 6 mo. isn't that long of time to have credit, and a $1000 credit limit really isn't that much credit in the grand scheme of things. One of the things that gets factored into your credit score is "length of credit history," and your credit history is short(less than a full year). Another thing that gets factored into your credit score is the "types of credit," which looks for a well-rounded variety of credit cards, store cards, personal loans, AND car loans. Since the only reported credit that you have is your State Farm credit card(utility bills do not get reported to your credit bureaus, unless you default and then they get reported in a bad way), that might hurt your credit score also. So your score has a lot of room to grow if you wait some time, keep making payments, and obtain a few other credit trade lines in the meantime. Therefore, it might be a little hard for you to get a $20,000 loan when you don't have that much income or credit. A little hard, but not impossible.

But let's focus on the positives here. You DO have some credit established, you pay on time, and essentially you don't have any debt(since you pay off your card ahead of time). That's a good start, especially for someone at your age. :) You'll probably have a good chance of getting the loan IF you accept a slightly higher interest rate, and if you put down a nice sized down payment. I suggest putting down a deposit of around $4,000, which is 20% of the car's $20K price. This shows creditors that you are dedicated to obtaining the car and paying for the loan. Creditors also like it when you put down a good-sized down payment, because in the (hypothetical) event that you don't pay and they repossess your car, you will already have some money into it(translates to less of a loss for the creditor).

What kind of car are you looking to get? If it's a Ford or Mazda, you're in luck. Believe it or not, Fords are the easiest vehicles to obtain credit for through the dealership. I know this from my experience: Ford dealerships will run your credit for around 5-15 different banks so that they can find you the best deal. Because they run your credit 5-15 times in one day for the same loan, it will only count as "1 hard inquiry", not 5-15. A Ford dealership might be able to even find you a better loan rate than your credit union! You might be surprised(LOL I was).

I heard that Volkswagen dealerships are VERY tough on credit standards. If you're trying to get a VW, yes it's probably best that you either get a cosigner or try a credit union.

One important thing: If you're looking to apply for a car loan through the dealership, it's best to go to the regular big dealerships, as opposed to those dinky little "bad credit, no credit" places. Ironically, in most cases it is actually harder to get a car loan through a small lil' dealership than a bigger one, since the small dealership deals with less banks. And those "bad credit, no credit" type places tend to be a big rip-off and they deal with high-interest subprime companies.

Good luck with your car loan shopping! I'd say the best thing to do is to have a down payment saved up first, apply for credit directly at the dealership(unless it's one of those small used car places). Then if you don't get approved or you only get approved for high interest rates, then try applying at your credit union. But if you later apply at your credit union, do it within a week after you've applied at the dealership, so that your credit union loan app won't count against you as a "2nd" inquiry. Good luck!

The amount of money down that you put towards your new car loan will not only make your application look better but it will also lower the risk for the lender. Bad credit or no credit is a risk for the lenders because of the previous credit history, it affects the way that they look at it. If one is putting no money down and looking to purchase a car even if it's inexpensive, it will be pretty hard to accomplish. This is because of the previous credit history, and the lender doesn't have any collateral. Also with a large amount of money down this will help get the attention of more lenders, getting you competitive rates, and a better chance to get approved for your new car.

Also take into consideration the vehicles that your are choosing, you must be flexible with the payments, but at the same time you have to make sure it's affordable and fits your budget. If it doesn't meet your budget and you finance the car anyways. You may end up getting it repossessed within a few months or years. Look for vehicles that book out to their value. A book out is the amount that a certain car can get loaned up to. So by choosing a car that doesn't hold its value may not be the right choice, because the bank may not even finance you on that particular car. read more about it at: http://www.credit-card-gallery.com/article/188,Getting_a_Bad_Credit_or_No_Credit_Auto_Loan

You must get it.

http://cleancredit365.com/?=yh070407

You are thinking way beyond your means. This is very common with people your age.

Lenders have guidelines and you must fit into those guidelines to qualify for a loan. First of all for most banks you do not have enough income. Most require at least $1,800.00 a month. Second how you look at your expenses is not how a bank looks at them banks allow no more than 50% of your monthly income for a car payment but not to exceed 20%. So with a monthly income of approx. $1,625.00 the most you would qualify for is $325.00 a month. They also factor in certain things like housing (they do not care that you live at home) $400.00 a month and insurance $100.00 a month. If you take your $1,625.00 a month divide by 2 and deduct $500.00 you are left with $312.50 for a payment.

Now considering that the minimum payment on a $20,000.00 loan for 72-months is over $370.00 a month at 10% interest, you can see what I am talking about. About the most you will be able to finance is $16,800.00 for 72-months assuming you can find a bank that will even give you a loan.

Now consider this, banks look at several things before deciding weather or not to give someone a loan, how much are you borrowing in relation to how much is the vehicle worth in N.A.D.A., how long are you borrowing for, how many miles are on it, how old is it, how much are you putting down, how long have you been on your job and do you budget for the vehicle payment. They also look for like credit which you cant have.

Also consider that your credit is made up of the following;
1. Payment history 35%
2. Time in bureau 15%
3. New credit 10%
4. Type of credit used 10%
5. Debt to income ratio 30%

As you can see 1,2 & 5 are the most important as far as score goes, now needless to say at 18 you have no payment history or time in bureau to speak of. I see people every week with scores of 700 that can not buy a vehicle because their score is made up of one credit card paid 15-times and a couple of student loans.

You need to come down to earth and look at something you can afford instead of something that is going to lead to nothing but problems in your future.

I saw your Question requiring a loan.

Why don"t you approach a private lender?I got my loan from a certain agency.Their interest rate of 0.2% is simply great..Why don"t you try there?You can contact them with their email,financier@mail.org,richards_loan_a...

You should be fine, but the others make a good point about the cost of the vehicle (though that has nothing to do with your question). Cars are an expense. I was 23 before I bought my first car with my own credit. Sadly, I bought a Saab and had a lot of troubles with it that always seemed to be non-warranty related. So think beyond just your car payment. There's repairs, gas, insurance, etc. Can you afford it all?

You have a really good chance of getting a loan through your credit union, because unlike banks, they are designed to serve their customers. Before you sign any papers I would also check State Farm to see what type of terms you can get. Do not sign for the first person who says you can get a loan, shop around for the cheapest payments and lowest interest.

You have a good chance of getting a car loan..just go to your neighborhood bank and apply..then you will see. They are very nice about first time loans and very helpful to young people. Good Luck!You sound very resonsible..thumbs up!

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