Help With Financing Situation

[Embry]

New to the board....read alot of previous posts and seen some valuable info. Thought I should see if I can get the same good advice.

Plan on buying a car i've been planning to get for 3 years. Finally have everything worked out except for one problem.

I'm currently unemployed but soon to get a job as a means to get financing for the car. The price for the car is 17,000. I'm planning on putting down 7-8k and finance the rest.

The problem is my credit isnt perfect (lower 600) and when I get the job do I have a good chance of getting a loan for the remaining amount? (7-8k)

How long do I have to be employed before applying for the loan? (plan on getting it like a week or 2 after I start working)

And finally Is it possible to get it without a co-borrower?

Thanks for reading and any help is appreciated

['97ventureowner]

Welcome to AF !
It will be a lot harder to get a loan in your circumstances now due to current conditions than it was say a couple of years ago. With the mortgage debacle and housing slump causing other issues, including talk of a recession, creditors are tightening their belts and seem less than willing to take on credit-risky clients. Granted the roughly $10,000 you want to finance may not be a huge amount, but the fact of your employment status and credit history may lower your chances. A lot of lender prefer to see financing customers with at least a 3 month minimum employment history in your current job. If you have been out of work a long time since your last job, that may not look as good to them as well. Most lender will probably require a co-signer depending upon their criteria for loan approvals. Where do you plan to apply for financing? A credit union should be your first choice if possible, ( the membership requirements for joining one have been lessened in recent years, sometimes simply living , working, or worshipping in a certain area qualifies you for membership.) You might even have a credit union option at your new job that you can join if you already are not a member. These places do not have as stringent criteria as most other financial institutions,and may be able to help you. If you are already a member, contact their loan dept. and talk with one of the employees and describe what you want to do and what your current situation is, and see if they may be able to help you,or at least offer some advice. Good luck.

[Embry]

Thanks for the info.

Credit union isn't really an option for at this time I can definately get a co-borrower.

I really dont have a problem with making the payments but would it be recommended that I use a co-borrower for those initial first few months than have the loan transferred directly to my name? Will the transfer mean higher monthly payments since my co-borrower as much better credit than I?

[Ray paulsen]

Here are some thoughts and facts you may ponder on

1 ) Starting a job or having been employed less than 2 years don't qualify you for prime interest rates unless you re-located from another job where you been at for several years in good standing.

2 ) Its not how long you have to be employed before applying for a loan, simply get a letter from your new employer stating start date - salary and what a long term asset you will be for the company.

3 ) It's not a matter of your choice about a co-signer, if one is needed the lender will demand, the only part the co - pilot plays is if you default he/she will be on the hook

4 ) The scary part in your post is your credit rating, no matter how much you put down the balance interest rate could out weigh not making the investment a good choice, its an area I comment on as I don't know you history as to why its blemished.

From just reading your post " 7 - 8 K " is a fair chunk to get valid transportation till such time you have re-established a fair credit rating and then buy what you want

Summary... If your going to be paying over 12%, you stay away from financing, and buy for cash only, till such time you have re-established, and if you need help with how to re-establish, then contact me throug my website...welcome aboard

['97ventureowner]

Originally Posted by Embry

Thanks for the info.
I really dont have a problem with making the payments but would it be recommended that I use a co-borrower for those initial first few months than have the loan transferred directly to my name? Will the transfer mean higher monthly payments since my co-borrower as much better credit than I?

That depends on the lender. Here's a case in point. A few years ago my mother-in-law needed another vehicle to replace her old one. I found a good used car and we financed her through our credit union,(we were all members of the same place.) Her credit was pretty bad and they required a co-signer for the loan. My wife ended up being the co-signer. After a couple3 of years I contacted the credit union and asked them if my wife could come off the loan as co-signer. They ran her credit report and found her score had gone up quite a bit so they took my wife's name off and kept all the other arrangements such as APR ,payment amount ,etc. all the same.
Your lender may have a specified length of time that they want a co-signer on the loan before they would consider other options. Also keep in mind while you are paying on this loan and keep the payments up to date, your credit score also goes up, barring any other financial problems unrelated to this loan. That in effect puts you in a better light to the lender and they might me more amenable to taking off the co-signer.That might be something to discuss with the lender when applying for the loan.