I'm hoping some of you might be able to give me some insight on how difficult it is to get financed through the dealer. Let me explain.

I had no idea that there was anything wrong with my credit that would keep me from getting an auto loan. However, I just applied for one from Chase and was turned down. I haven't gotten the letter back to tell me why, but I have a strong suspicion that it has something to do with my debt ratio.

Ok this is where it gets complicated. I have just consolidated about 6 school loans together and greatly reduced my payments and lengthened the term. But this doesn't officially go through until later this month. So right now, my credit report shows these big loan payments.

The problem is that my Z arrives around Sept. 3, and there's no way this stuff will be cleared before I have to get a loan. I have done my budget, and I can absolutely handle the car payments no problem. So my question is, will the finance guy at the dealership be more willing to work with me? Do they have lenders that don't have as high of requirements as a bank like Chase? Should I even bother bringing in all my loan statements to show them my new situation? Am I just screwed?

Any helpful insight is GREATLY appreciated, as I am literally sh!tt!ing my pants right now. After 18 months of waiting, if something like this keeps me from getting my car, I don't think I can take it. Thanks!

 

I had the same fear. I consolidated my student loans last December. Between that and my Rooms-to-Go 18 months no interest account (over end of 2002) and my business expense account on my credit card (payed off every month), I was worried. I contacted my credit union and simply ask them if they thought I would be ok. They said they could see no problem. This loan will be twice as much as my current car loan I got from them 2 years ago with no job (student). Now that I am pulling down the big bux (ok ok not so big, but very respectable) they said as long as I could afford my payments.

Point: Find a good credit union and get a co-signer if this is your first car loan.

 

you can get your credit reports online, for free or a small fee depending on state. clarkhoward.com has the links. If you are a member of a credit union, you should go in and speak to them in person and apply there. 2nd choice would be your bank. I am sure the dealer will work with you, but stand by for a very high interest rate.

 

Well at this point I will accept a high interest rate. All that matters now is that I get a loan, period. I am going to check my credit report to make sure that nothing bogus is on there, but even if there is, it won't clear for 30-60 days after I dispute it or ask for it to be removed by the creditor. I don't want to apply for another loan until I get my report. I have just recently paid off an auto loan on my current car, so I hope that helps me. I do have a couple of high balances on credit cards, but I just finished paying another one off and am making steady payments on the others. I'm worried that the one I just paid off also won't show up yet. Thanks for the help guys, I appreciate it!

 

Infinite, you should be able to get a free credit report since you were turned down for a loan. Chase should give you the name of the reporting agency they used.

 

Yup that's what I'm going to do. Thanks wxtornado.

 

I was curious, since this is my first car purchase.....what would be a decent percentage rate on a loan? I know there are factors like credit, etc., but I want to get an idea.

 

Go to your bank and speak directly yo a loan officer. Show them documentation concerning your restructuring of your student loans and you should be ok. The loan officer can pull your credit report and reconcile your documents and calculate the correct debt ratio. Loan officers have a discretion in making loan decisions more so at small community banks, then large ones. However if you can demonstrate to them with documentary evidence that your debt ratio is actually lower than your credit report shows, they can justify an exception to loan policy and more than likely you would get your loan at a good rate. If you go to a dealer for financing they always have Nissan Credit to fall back on. What you have to look out for at a dealer is that they "shop" your loan and shotgun your credit applaication to multiple sources in attempting to get you a loan. Each place they send it to is considered a credit inquiry and more than likely will lower your credit score due to the number of recent credit inquiries. Good luck...just remember you get better treatmnet by making yourself known to the loan officer personally, rather than being just another piece of paper floating across their desk.

 

FLZman - thank you for the info. So I should find a small bank in town and go talk to the loan officer? Or should I even try doing this at Chase? I tried to go apply in person at a Chase branch, but it turns out they only do auto financing over the phone. So I guess that wouldn't work. Would the finance guy at the dealership have the same discretion, or be able to give input to loan officers he talks to about my situation? And what do you mean by falling back on Nissan credit? Thanks again!

 

I would talk to a loan officer where you presently bank. If you bank at Chase, I would go to another bank or credit union where you can personally talk to the loan officer. The big banks are not into personal service and they tend to be by the book with centralized operations and decision making...thats why you have to apply by phone. A small bank stays in business by being personal and generally go out of there way to do business. the big banks have so much business that you don't get personal service so you can't physically show them what you have done to lower your debt ratios etc. The dealer does not make loans. They merely send your application to lenders and get a fee for if the lender makes the loan. Some have influence with a bank especially if the bank is financing the dealers inventory. What I meant by the dealer having NNA to fall back on is that NNA has special programs and incentives that banks do not have. Car financing is a big business and the car manufactures have these finance arms to basically subsidize the purchase of the cars they make. When the economy is good they charge about the same rates as a bank. When sales are slumping they stimulate sales by offering reduced rates like you see now from auto makers who have a lack of sales. Thats why you are seeing the adds for Zero percent financing etc. I have financed cars with a dealer if they can find me an interest rate better than I can get from my bank or credit union. I think this occured twice in the last 10 purchases.

 

I was planning on getting the 'blank check' approved for $XXXX from a peoplefirst / lendingtree.com type of place...so when I go to the dealership I can say, well I'll write you this check for 34K (knowing I have a 6.2% rate on it) or y'all can try and beat it.

My question is- when should I go online to get this check...How long is my check good for with the 6.2%. If it's something like 30 days- I won't apply yet b/c my car won't be in till October.

I checked the sites but couldn't find this info- anyone know?

Thanks!

 

peoplefirst is 45 days.

 

Don't be discouraged. I was turned down by peoplefirst, and was like, "damn, there goes my Z."

Go to lendingtree. Like they say, "when banks compete, you win." That's where I got my loan. My credit isn't perfect, and my debt ratio is astronomical since I got my mortgage. I was still able to get a blank check preapproval from 2 different lenders. The rate was a lil higher, but still wayyy lower than what the dealer was gonna get me for. I have the blank check in my hands right now. It is good for 30 days, but they will extend it for a few days.

It was so easy, and I'm so happy with lendingtree, I'm doing my Home Equity loan through them also.

Good Luck!

 

Funny, leanding tree rejected me but peoplefirst.com approved me.

 

Check on Nissandriven.com You can find out how much of a loan you can get. This is broken down by how much you can pay a month. Hope this helps. See ya on the road.

 

If you own a home and have equity you could get a home equity line and get a rate between 4.5% and 5.5% (at least in FL). This allows you to write off the interest as well. Some banks (foolish on their part) are making home equity loans for up to 125% of the value of your house. If you have a stable job and don't plan on moving for a few years its a viable alternative. It also allows you to set your own payment as long as you meet the minimum on the line. Most set the minimujm payment at 1.5% of the outstanding balance for a $30,000 loan that makes the payment $450. You would then be able to write off about one 25-33% of the interest you pay as interest expense on schedule A lowering your effective rate by approximately one third or so.

 

Thanks again guys. This is all really good info. So my only problem is high debt ratio and balances, meaning I always make at least minimum payments and on time. I guess my main question is, if that's the case, should I be able to find someone who will give me an auto loan, regardless of rate? At this point I'm stressed that I can't get one at all. If you guys think I can get one, but it's just a really high rate, I will be totally happy with that, and refinance in a year or something.

Ok, so my plan is to get an estimate on my trade-in and determine how much down I can get. Then I'll know the max amount to ask for in my loan. I won't go to my bank where my checking account is, Bank One, because I'm sure they'll treat me just like Chase did. I'll try to get into a Credit Union and apply there, talking to the loan officer. If I can't or they say no, then I'll try lendingtree, then if that is a no I'll have to pray that the dealership can find somebody. Even if I do have one before I go into the dealership I want them to try and beat it.

So do these special programs/lenders that NNA offers have more leniency when giving out loans? This is really killing me, I gotta figure this out soon

Thanks for the input!

 

That's a great idea!

But I rent an apartment...


Heh, thanks though. I would definitely try that if I did.