loans and other money questions

[redraptor]

Hello all!! OK so I'm a 21 year old PetSmart employee and have a few questions regarding money issues. I have been looking to get into a new car for a while due to gas and reliability problems. Anyway I would like to get into something for around 7-9k. Now I do not have this money at all but would really like to get into this new car ASAP. Is it possible to get a loan at my age and work record. I have held a few jobs over the years but nothing super stable. I recently (3months ago) started up at PetSmart and am very happy there and plan to stick with them for a good while. Again I'm not sure if any of this is important, I'm just so clueless on money related stuff and couodbuse some guidence. Thanks in advance!

PS I apologize for my horrible grammar. I'm stuck to using my phone for internet access and I'm not nearly as efficient on this as I am on a computer.

 

[melll]

I got my first loan around your age. By loan I mean, got a car financed, at a dealership, they did all the work and I was aproved.

As long as you have had a job for the past 3 months, and its full time, and got most of the recent pay stubs, with no previous bad credit. You should get approved no problem.

I got a $13,000 car financed. This is in Canada, mind you. Not sure how it is in your area.


If you have credit cards, make sure to have them below 50% full. That may help aswell.

All you can do is try, and see what happens.

 

[redraptor]

The only problem I see there is that I'm part time. Other than that I have NO credit cards so no problem there, and generally things have been good money wise for me.

 

[ntrddragn]

Well let me ask you this, is the reliability problems that big of an issue? Or is it something you can fix for a thousand or less? While getting a new car is so exciting and fixing an old one seems like wasting money but being in debt is not a wise thing to do if you really dont have a staple full time income. Specially with this economy. While you 'plan' on staying at PetSmart for a while doesnt necessary mean thats PetSmart plan.

But if you insist on buying one, then I would suggest trying at a credit union. They tends to have lower interest rates. But you mention you dont have credit cards so that means you dont have credit history. This will work against you oddly enough. I would think you might need a co-signer or a down payment. I guess sale the one you got now and use that as down payment.

 

[sloseph]

have you ever had any sort of credit before? overdraft on you bank account? phone contract?

if not you really might struggle, in most cases bad credit is better than no credit

i got my 1st loan when i was 19 but that was when banks were giving out money to anyone regardless of them being to pay it back or not

also getting finance on a new car might be your best bet

my advice is if you think you can afford the repayments (probably about

 

[melll]

The only problem I see there is that I'm part time. Other than that I have NO credit cards so no problem there, and generally things have been good money wise for me.

Try applying for a Capital One Mastercard. They honestly will aprove anyone.

Seriously, that it. I got a Capital One with no credit at all as my first card.

Had a friend apply and get one and aproved, on bad credit!

That will get your credit rolling.

 

[redraptor]

Well my plan here is to sell the explorer (the car I have now) and use that money as a down payment. The car isn't worth much more than about 3k and its mostly a gas issue. Plus it does have a solid 165k miles on it which isn't bad for a ford. IN Any case...yes I do not have any credit cards. I have a debit card that I use for most of my purchases and occasionally used the credit option when I buy certain things. And yes I have on a few occasions over drafted on my account. But that was for certain things that I had little control over. I am usually very good with my money. And what does financing mean? I'm sorry, again I am incredibly uneducated in this sort of thing.

 

[sloseph]

when you say you overdrafted, was that one that you had already agree with the bank or was it a "oh crap iv spend more than i had now they will charge me" sort of overdraft

as for financing, basicaly you put a deposit down on the car then pay the people at the dealership x amount a month for y amount of months till the car is paid of

its usaly works out cheaper than a loan due to paying less interest and more often than not your more likley to get approved

 

[redraptor]

Yes it was the "oopses" I went overmore than what I had" one. It has happened 2 or 3 times because I've been hit with things I didn't even know what I was paying for.

And what if I go through a private party. I plan on going used

 

[sloseph]

ah that right, well its a lot better if you had an authorised overdraft but luckily those oops incidents don't go on your credit report

as for going used that pretty much gets rid of your option to finance so it will have to be a loan, like i said though, might as well go to the bank and give it a try

 

[redraptor]

Yeah absolutely. Is it easier to get financed through a dealership than a loan through the bank? I have been tossing around the idea of going through the dealership mainly for a warranty. If it costs a little bit more to go through a dealership...than It might be worth it if I get a solid warranty and the option to finance.

 

[sloseph]

i know it is over here ye, i would have though that would be the same over the pond

plus you might be able to use your current car as a deposit if you trade in

 

[redraptor]

Oh yeah absolutely. That's what I plan...but gonna try to sell privately and get a little more money. The big deal I'm running into now is the car I was dead set on is rediculously jacked up in price when compared to private parties. I'm able to get said car with 50-60k miles for 6-9k where as if I go to a dealer I can get the same car with 95-100k miles for 10-12k. I want something that is going to be reliable but for 10k...I want something with less than 65k miles.

 

[melll]

I think it is easier getting financed (loan) through a dealer!

Because they will work it with the bank to try their best to get you the loan.

 

[tommy_ed]

you're going to need a co-signer, but with 3k down it shouldn't be a problem.

as the poster above mentioned, credit unions are the way to go

 

[redraptor]

Well I ran the idea of having my father get the loan and I would pay him that way I wouldn't have a problem with getting the loan...but he wasn't so keen on that idea, but I completely understand. That doesn't mean Co signing though correct? Co signing essentially means that if I'm unable to pay he can help out. But the responsabilty lays 100%on me.

 

[ntrddragn]

plus you can GAP insurance at a credit union for dirt cheap. the dealer will mark that up 1000%. I got a loan from a credit union and the GAP insurance was $125 while I was sitting there at the dealership finishing up my paper work. I over heard a sale guy selling the GAP insurance to another customer for $900. Outrageous market up. I think the cost to the lender is like $100. Also you can get 'pre-approve' from a bank and then go to a dealer and see if they can beat that deal you got. But if you want to buy from a private owner, you will need to be approve with check in hand before any sane person would 'hold' the car for you.

Edit: No, a co-signer is the next in line in case you default from the loan. Both of your name will be on the loan. So your dad will have your car loan on his credit report also. If he gets the loan for you then he is the primary loaner not the co-signer.

 

[DROIDdidME]

Well I ran the idea of having my father get the loan and I would pay him that way I wouldn't have a problem with getting the loan...but he wasn't so keen on that idea, but I completely understand. That doesn't mean Co signing though correct? Co signing essentially means that if I'm unable to pay he can help out. But the responsabilty lays 100%on me.

If your dad were to co sign on the vehicle, he's taking responsibility for payments to be made just as much as you are. If you're not able to pay, the bank is going to expect your dad to.

 

[jamor]

The only problem I see there is that I'm part time. Other than that I have NO credit cards so no problem there, and generally things have been good money wise for me.

Unfortunately that's not a good thing. No credit is negative.

You need to build up your credit history. They will look at your debt/equity ratio or available vs used credit.

They will look to see if you have financed in the past without missing payments. Just like some pet adoption agencies look to see if you'll be a responsible owner, banks look to see if you would be a responsible payer.

Keep in mind, every time you apply for a loan, your credit report logs a credit check. The more credit checks you get the lower your score goes (not by that much though). Also, banks will look at it as a bad thing if they see people always check your credit - so don't go putting in 10 applications. Once you get rejected 3 times.. STOP. Get a credit card and start building your credit. Pay it off in full each month or every 2 months.

It really sucks. They might say you need a co-signer or give you a high interest rate.

You'll probably be charged at least 10% if you have little to no credit.

 

[Sevreth]

If you do end up signed for a car lease. Make sure you have some money down (helps in the long run) or use the proceeds from the explorer sale to pay down the loan.

Also, make sure you are allowed to pay the loan off early. I always pay more than the monthly payment, so I am done faster than 5 years. even 20 dollars more over helps over time.

I feel your pain though, I just signed for my newer honda accord last month. I have my chevy blazer still, but going to sell it in the spring. It has been nothing but a money sink for me since I owned it.

Cheers,

-Sev

 

[jamor]

Well I ran the idea of having my father get the loan and I would pay him that way I wouldn't have a problem with getting the loan...but he wasn't so keen on that idea, but I completely understand. That doesn't mean Co signing though correct? Co signing essentially means that if I'm unable to pay he can help out. But the responsabilty lays 100%on me.

Absolutely not!!

He is 100% on the hook. It's just a way for you to build credit. He bears just as much responsibility as you.

 

[droiduzr2]

Cars seem dirt cheap in the US.
My suggestion is to look at the long run a bit.
You are 21 now.

What about buying a 1 year old demo car like a Hyundai since they seem to offer you a really good warranty as does Kia and Mitsubishi.

My point is, try to get the newest car possible for $10k and make it last as long as you can. Save the rest of your money and get your butt into College and try to buy a house of any kind asap.

Try to ALWAYS remember this. Cars are money pits.
They start off at $50k or whatever and work their way DOWN in value. Your Education and Home work their way UP.

If you don't care about the need of having a brand new car you will ALWAYS save yourself THOUSANDS of $$$ by buying a slightly used car. Aim for 1-3 years with next to no miles with warranties on them. Take the money saved and plow it into your Education or home.

ALSO- use some money to TRAVEL before you have kids and a mortgage. Just go somewhere. You can probably go to Europe for a week for $1500 food and shelter. You guys have lots of amazing deals. You may be able to volunteer with the Red Cross to get shelter and food you pay for travel. Perhaps volunteer in Africa and you get to see some amazing scenes while helping out.

Money will come and go so will things BUT memories last a life time and you will cherish those. Those events will help you get further in life with women and work wise because you will be able to talk about a cool thing that you DID and people will be curious because they wish they had done it.

You are 21 now but you will be 31 in no time
Enjoy your time but get out and see the world.
Life will still be here waiting for you when you get back.

 

[droiduzr2]

I seem to lost the ability to edit my posts.

If you left where you are living now and came back 6 months or 1 year later...how much would have changed that you would actually miss.

Come to Canada it's a damn cool country but I would aim for Africa or Europe or Asia.

 

[Sevreth]

ALSO- use some money to TRAVEL before you have kids and a mortgage. Just go somewhere. You can probably go to Europe for a week for $1500 food and shelter. You guys have lots of amazing deals. You may be able to volunteer with the Red Cross to get shelter and food you pay for travel. Perhaps volunteer in Africa and you get to see some amazing scenes while helping out.

Money will come and go so will things BUT memories last a life time and you will cherish those. Those events will help you get further in life with women and work wise because you will be able to talk about a cool thing that you DID and people will be curious because they wish they had done it.

You are 21 now but you will be 31 in no time
Enjoy your time but get out and see the world.
Life will still be here waiting for you when you get back.

I agree fully. I was 20 not that long ago....now I am 26...life passes so quickly...

I have seen alot of europe and North America. Spend your money on a great trip.

I would not trade my experiences over the past few years for any car (even a Bugatti_Veyron).

Cheers,

-Sev

 

[A.Nonymous]

My personal advice (which I'm sure I'll get bashed for) would be to pay cash for the car and save cash for something else. For example, you've got $3k. Let's say a payment for you is $300.

I'd advise you to pay $3k for a car in cash. Stash the $300 in the bank every month. (You'd be paying this to a car company anyway so it won't hurt you financially.) In just 6 months, you've got $2k stashed away nearly. You can sell the car and buy a $5k car if you want. Or, you drive the $3k beater for a year and now you've got nearly $4k in the bank. Now you can buy the $7k car you wanted in the first place and you don't have to borrow any money to do it and you don't put your dad at risk either.