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Posted in Auto Loans
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Question By
maerenee94

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Auto Loan- Joint? Separate? Pay off existing loan?
My husband and I are in the market for a new car. We both have credit scores estimated to be over 750. I currently have an auto loan with $5,500 left to pay off.I am not sure if it matters but I cosigned with my father on that loan. We have the capability of paying off my auto loan right now, but we worry my credit will take a hit as it would be paid off almost a 1.5 years early. We are wanting to purchase a new car by year end, leaving my credit score not enough time to recoup.
My husband does not and has never had any loans.
Would it be smarter to pay off my loan now and apply for a new auto loan or leave my loan as it stands and apply for an additional loan? On top of that would a joint or separate loan be better?

Thank you in advance for any help!

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First, don't "estimate" your credit scores, get them so you know where you stand. Keep in mind that most auto lenders will use a version of FICO scores and usually an auto version. If I were in your shoes, I would consider paying the loan wayyy down but not off. That action would help your scores the most. As far as for applying jointly or on your own, I am not sure. If you both have good credit then that is good, but if your husband has no previous auto loan history then that is bad, but would it be enough to be denied if you applied jointly? I am not sure, it would depend on the lender and all lenders are different.

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