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Old 06-29-2010, 04:08 PM   #1
danifox
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Auto Loan Question

Since I'm planning on going to the Chevy dealer tomorrow with my dad, I decided to go ahead and apply for an auto loan with my bank (Bank of America).

....I got denied, they said they would be emailing me in 30 days to tell me why. *Sigh. Does anybody know why this would happen? My dad is saying it's because I'm 20 years old & that when I turn 21 in November it will be better for me to get credit cards and a loan. I've also tried to apply for other credit cards last year & got denied. I don't understand why... I've had my BoA credit card since 2007 & my credit is 730.

Anybody know why this would happen? This really blows... my dad told me to try to apply for the loan on Autoway's website but if we go tomorrow I'll have them do it there. I was originally going to go with BoA cause their rates are as low as 3.59% and I didn't want my credit to be ran all over the place at the dealership.
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Old 06-29-2010, 04:13 PM   #2
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My bro got his at 21 from an auto loan website but he had a steady job. I am also 20 and am taking out a loan but i dont think they will back me unless my dad also signs it but i also have 15g in the bank im not sure of your history with your bank or any jobs that they would see you have.
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Old 06-29-2010, 04:14 PM   #3
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Your age is a big factor, but not the majority of it. You also have to look at your debt to income ratio, and how much credit you have aquired in the past. If your dad can co-sign, that would be a huge step in the right direction for you.
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Old 06-29-2010, 04:14 PM   #4
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its harder to get a loan these days. how long have you been at your current job? how much do you make? that also comes into play. shouldve let your dad co sign.

now youll have to take a hit on your credit report.

word to the wise...leave BofA. they sucks balls.
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Old 06-29-2010, 04:14 PM   #5
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Most likely denied because your credit history is too short or does not contain enough different types of credit lines.
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Old 06-29-2010, 04:21 PM   #6
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Having my dad co-sign on the online app. would of been the "Do you want to apply individually or jointly?" optional correct? I don't want my dad to co-sign for me cause his credit is SHOT... if anything I'd have to have my mom co-sign for me hers is some-what better. I've never had a late payment with BoA always paid my bill on time. So I shouldn't have any bad history with them.

I was told it's harder now to get loans/credit cards... that a couple years back you could be 18 and get all that. Now you have to be older.

Basically co-signing is for if I default then the person that co-signed for me would be able to take on the car correct?
I've been with my job for a year and 2 months, that's what I put on the application. I know my credit score will go down but it'll do that in 30 days. Everybody says BoA sucks but I've never had a problem with them... my other option is to try the local credit union here. Their interest rate starts at 4.1 I believe. I swear nothing can go right for me... if it's not one thing it's the other.
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Old 06-29-2010, 04:23 PM   #7
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Originally Posted by 04Ram2500Hemi View Post
Your age is a big factor, but not the majority of it. You also have to look at your debt to income ratio, and how much credit you have aquired in the past. If your dad can co-sign, that would be a huge step in the right direction for you.
+1

I do a lot of banking with BofA but wouldn't use them for a car loan. I got my loan from Chase Auto Financing @ 3.75%, try them, they can give you an answer in @ 30 seconds. Also, Capital One does instant approval auto loans on line, you could try them, too.
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Old 06-29-2010, 04:25 PM   #8
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Most likely denied because your credit history is too short or does not contain enough different types of credit lines.
That's the thing though... I've tried to apply for other credit cards even when they send me them through the mail saying I'm "pre-approved" & I still get denied. It's not like I haven't tried to build up more credit they just don't want to approve me so I don't understand how they want me to get better credit if they're not willing to give me any.
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Old 06-29-2010, 04:32 PM   #9
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The dealer should be able to help you out with a 730 credit score, and the interest rate shouldn't be high. My dealer offered 4.5% but the finance guy was such a jacka$$, I used my bank instead.

You have to consider how much you want to finance, too. That makes a difference.

BTW, Chase and BofA are in bed together, but Chase doesn't have the loan restrictions that BofA does. I think they'll be able to help you. They were great to work with, too.
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Old 06-29-2010, 04:34 PM   #10
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Here's an idea. Get the financing with the dealer and re-fi in 3-6 months for a lower interest rate.
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Old 06-29-2010, 04:36 PM   #11
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I think it has to do with previous high-credit limit.

If you have not had a large loan in the past, they are reluctant to give you a $20- or $30,000 auto loan now. Sometimes even with a large amount of cash down they won't do it.

Most people will need a co-signer for an auto loan their first time out.

Hope this helps you understand. Also, I would recommend that you don't do a bunch of online credit apps. Every time a different company runs your credit you lose a point or two. Those few points can make a difference in getting a loan and not getting a loan.

My recommendation is to go to your bank where you do your personal banking (provided you have a good relationship with them) or to the bank or credit union your parents use. Otherwise, let the auto dealership that you are buying your car from do the work for you. They place millions of dollars of business with lenders on auto loans alone and they might know just where to send you once they take a look at your/your parents credit application.

Good luck getting the car of your dreams!
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Old 06-29-2010, 04:39 PM   #12
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Quote:
Originally Posted by danifox View Post
That's the thing though... I've tried to apply for other credit cards even when they send me them through the mail saying I'm "pre-approved" & I still get denied. It's not like I haven't tried to build up more credit they just don't want to approve me so I don't understand how they want me to get better credit if they're not willing to give me any.
More credit cards are not necessarily better. You need variation in credit lines to prop up your score. I'm talking about revolving store credit (department store/Discount Tire/etc), secured loans (car loans - small ones on used cars, not on a brand new car, to show consistent payments/payoffs), student loans, etc...

You also need to look at how you manage your credit card(s). Do you carry a balance from month to month? Do you pay more than the minimum? How much of your available credit do you use? There are multiple factors that go into approval for additional lines of credit. Banks are hurting from the losses they've taken over the past couple of years so they are much more selective about who they will give credit to. As for those "pre-approval" letters, they are just a marketing ploy...read the small print on those offers.
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Old 06-29-2010, 04:44 PM   #13
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Did you just move? That's what killed mine - the different addresses. My officially address WAS Tennessee but I was only here for a week and it didn't give the credit agencies time to change my damned address.
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Old 06-29-2010, 04:57 PM   #14
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I was just eating dinner & I told my parents that I guess I would need to have a co-signer. My dad said they will give me a loan but with a high interest rate he said like 9% which is not what I had my mind set on (I didn't want anything more than 5.0%).

Quote:
Originally Posted by Chevyg1rl View Post
Here's an idea. Get the financing with the dealer and re-fi in 3-6 months for a lower interest rate.
Isn't refinancing bad though?

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Originally Posted by little_bank_robber View Post
I think it has to do with previous high-credit limit.

If you have not had a large loan in the past, they are reluctant to give you a $20- or $30,000 auto loan now. Sometimes even with a large amount of cash down they won't do it.

Most people will need a co-signer for an auto loan their first time out.

Hope this helps you understand. Also, I would recommend that you don't do a bunch of online credit apps. Every time a different company runs your credit you lose a point or two. Those few points can make a difference in getting a loan and not getting a loan.

My recommendation is to go to your bank where you do your personal banking (provided you have a good relationship with them) or to the bank or credit union your parents use. Otherwise, let the auto dealership that you are buying your car from do the work for you. They place millions of dollars of business with lenders on auto loans alone and they might know just where to send you once they take a look at your/your parents credit application.

Good luck getting the car of your dreams!
Yep... I haven't applied for a credit card since last year. I knew that that would lower my credit unfortunatly. You know I originally wanted to actually go into a BoA and do the loan app. there not over the internet, I thought that would of been better? Thanks for the help girl!

Quote:
Originally Posted by rolnslo View Post
More credit cards are not necessarily better. You need variation in credit lines to prop up your score. I'm talking about revolving store credit (department store/Discount Tire/etc), secured loans (car loans - small ones on used cars, not on a brand new car, to show consistent payments/payoffs), student loans, etc...

You also need to look at how you manage your credit card(s). Do you carry a balance from month to month? Do you pay more than the minimum? How much of your available credit do you use? There are multiple factors that go into approval for additional lines of credit. Banks are hurting from the losses they've taken over the past couple of years so they are much more selective about who they will give credit to. As for those "pre-approval" letters, they are just a marketing ploy...read the small print on those offers.
Now that you mention student loans, this makes me think I won't even be able to get a school loan when I want to apply for one. I usually always pay off the amount due on the card, I always pay more than the minimum.

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Did you just move? That's what killed mine - the different addresses. My officially address WAS Tennessee but I was only here for a week and it didn't give the credit agencies time to change my damned address.
That's a negative. We've been at the same house for the past 9 years (in December).
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Old 06-29-2010, 05:16 PM   #15
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Maybe actually go into Bank of America or the bank you want? When I was pre-approved for mine I don't even think I had to put in my income. Having someone actually put in all the information needed might be good.

Or even check your credit and see if there's anything weird going on. It doesn't make a lot of sense to me.

Did you apply for something more than you need (I got pre-approved for $45k with my bank because I wasn't sure what I was going to get)?

Sometimes, banks have this stupid hidden "in house" rule that they won't give large car credit to people how haven't had credit long enough... So you're looking for a 5-6 year loan and you've only had credit for 3 years... That sort of thing.

Also, is the credit card in your parents' name (with you as an authorized user or you as a joint owner).
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Old 06-29-2010, 05:22 PM   #16
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i'm 23 and got a loan on an SS camaro with 0 down. I put no money down because 5-6 grand would have only dropped the payment 30-60$ a month, and i'd rather have that money in an emergency fund for unforeseen events. I have solid credit history with many types of credit lines. Never had a late payment and have had credit since my 18th birthday. Even with a credit score around 750 GMAC was the only company willing to lend me the money at 72Months, and 7.5% Pretty terrible terms but i took the loan because i'm more then able to pay the loan. The reason for my 7.5% rate is cause of my lack of auto loan history. I was denied by 2 other banks because of a lack of auto loan history.

My intention is to refinance with my local bank in 5-6 months so i'll have a solid year of payments. Plus my insurance rate just dropped 60$ a month so that's helped me out also.

My advice is sit down and figure out how much of a car you can really afford. If you sit down and realize you can't afford the car hold off save up a large sum of money to put down. In 3-4 years I'm sure the camaro will be even more amazing.

Another thing to think about is your insurance rates. MAke sure you get a quote before you buy the car. Some people have bought the camaro and realized after there insurance would be 300-400$ a month...

Good luck and you'll love the car.
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Old 06-29-2010, 07:12 PM   #17
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as everyone has mentioned, and rightfully so, it has to be your debt-to-income ratio. Your lack of credit history will also be a part of your reason for rejection.
Aslo as mentioned, BofA isn't the best way to go for anyone. Find a credit union you qualify for and start a history with them.
By the way- there is a reason they use debt-to-income as a qualifying factor... it's not just for them, it's for you. If your d-t-i is high it's best if you stay away from a new loan. It may suck, and I know you THINK you can do it, but you'll be glad you waited. (or were forced to wait in this case).
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Old 06-29-2010, 10:29 PM   #18
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Having a 730 credit score means nothing if you only have one trade line. This means that you have a score that is unreliable. You need 3-4+ open and active accounts to have a score that is reliable plus have 2+ years of credit history.

No refinancing is not bad unless it is putting you in a worse loan.

A co-signer is 100% liable for the loan just like you are.

You do NOT want to ever carry a credit card balance if you can help it. You do NOT ever want to go over 30-50% of your revolving credit limit.

Sounds like you don't have enough credit.
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Old 06-30-2010, 06:16 AM   #19
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Since I'm planning on going to the Chevy dealer tomorrow with my dad, I decided to go ahead and apply for an auto loan with my bank (Bank of America).

....I got denied, they said they would be emailing me in 30 days to tell me why. *Sigh. Does anybody know why this would happen? My dad is saying it's because I'm 20 years old & that when I turn 21 in November it will be better for me to get credit cards and a loan. I've also tried to apply for other credit cards last year & got denied. I don't understand why... I've had my BoA credit card since 2007 & my credit is 730.

Anybody know why this would happen? This really blows... my dad told me to try to apply for the loan on Autoway's website but if we go tomorrow I'll have them do it there. I was originally going to go with BoA cause their rates are as low as 3.59% and I didn't want my credit to be ran all over the place at the dealership.
We really need more info as a lot more is involved then just your age and credit.

- How much is the car you're looking at?
- How much are you putting down and how much will you be financing?
- How much do you make a month and is it part time or full time?
- Do you have any other monthly bills? Credit cards do count here.
- Also what is the limit on your credit card?

To me its sounds like (as already mentioned) that your issue is your credit history. If the only thing on your history is 3 years of a low limit credit card then you're no better off then John Doe over there who doesn't even have a credit history.

Another problem you could be having is your debt to income ratio. After you figure out how much the car and your other bills will run a month, if you are not making at least twice this a month then your chances of getting prequalified is greatly reduced. The only things you can do in this case is either put more money down or get a second job.
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Old 06-30-2010, 07:03 AM   #20
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Go to a local community bank to apply. You should be able to meet face to face with the loan officer who will tell you exactly why a loan decision is made.
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