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Posted in Auto Loans
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Question By
OnjRaynee

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0 People Helped
Can I get approved for a auto loan of $14,000 with a credit score of 525?
I plan on putting down a down payment of $5000+ because my credit score is so low. Is it possible for me too even get a car loan or am I being unrealistic with such a poor credit score. If I do qualify for the car will paying on time boost my credit score?

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1076 People Helped

Helpful to 43 out of 62 people

You will probably be able to do it with less than 5,000. I got a used car at Carmack and put 1,000 down and it was in great condition with 39,000 miles and about 12k all in. Tell them you want to put a thousand down and see what your monthlies are, then go from there.

3 Contributions
17 People Helped

Yes I did something very similar...

Helpful to 17 out of 18 people

Six months ago I was as in exactly the same position. I was 23 with a CS of 540. A list of medical bills in collections, and the only positive was a 500$ 12 month secured personal loan that closed 2 years ago. I ended up buying a 2017 Mazda 3 Sport and put 7,000 hard earned grand up front as a down payment. I was approved through Chase at 8.75% with a 72 year note. 8.75% is excellent for a 540 score. The 500$ secured loan may have helped a bit, but a large down payment will give you room to bargain. My brother also worked at the dealership as a technician and new the gentlemen that dealt with me. If it wasn't for that family tie I would have been fortunate to see 12%. So you will get stuck with a 10+ most likely, but your first payment will shoot your score up by nearly 40 points. I paid on time for 4 months then got a credit card from the local credit union and that also netted a 45 point increase( just a low rate visa unsecured 500 limit). 4 months in I also opened up a 100$ secured loan that netted another 10 instantly ( anything above $100 showed diminishing returns when I ran the sim).  Along with on time monthly payments I've seen a 100 point increase in 5 months. Now I plan on giving it another 3-4 months of on time payments then getting another card at 8 months with at least a 2k limit at approval then only focus on building those 2 cards credit limits as high as possible. While keeping utilization at exatcly 7%. At 11 months ask for increases CL on both cards.  Finally at 12 months I'll re finance and hopefully see a low 6 or 5%. Refinancing will close out my oldest account but that's why setting up a 12 month secured loan 1-4 months after you receive the auto loan will pad the drop and give you 14-15 months to contour building history if you feel it nessesarry. So yes getting an auto loan when I was subprime was a great decision and I think it still would have been at 10+ it paved the ground for rapid CS growth and when done correctly you will only be paying on a double digit interest rate for 12 months. Do the research and make sure your educated on each of FICOs factors, and you could find your self coming up on 680 by the 12 month dead line. Shop hard and cut that interest rate into 8 maybe 6 if your lucky. Best wishes on your endeavors. 

4 Contributions
325 People Helped

It's Not Impossible...

Helpful to 215 out of 243 people

It's not entirely impossible to get an auto loan with a low credit score. I recently purchased a 2012 VW Jetta through CarMax and was approved for a $17K loan over a term of 72 months from American Credit Acceptance. My Credit Karma score was 585 at the time, Equifax and Experian were in the 550's. Now, the catch is I'm paying an 18% interest rate, but I knew I was going to pay an astronomical rate and actually budgeted for up to 25% when I was looking for cars (not realistically, but just to be on the safe side). It's not the worst thing in the world as I didn't think I would be eligible for financing, period. Since I've obtained the loan 2 months ago, my TransUnion score is now at 613 and Experian and Equifax are increasing at about the same rates. My plan is to keep making payments on time and try to obtain a credit card sometime this year so I can either refinance the loan or trade this car in for a better rate in 2016.

When financing a car on poor credit, you have to keep two things in mind- 1) You're going to get ridiculous rates with ridiculous companies & 2) You also have to see it as an investment for an opportunity to repair your credit. Remember, all mistakes come with consquences, your credit included. If responsible with what you are given, your score should rise to reflect your responsibility. Once you've established credit worthiness, you'll be able to apply for a loan with more desireable terms. 

Reply by
Milorocky2

1 Contribution
10 People Helped
Helpful to 10 out of 11 people

I made the exact deal for a car loan with low credit score for 72 mos and 18% interest. Just checked my credit score and it has gone up..

Top Contributor

Reply by
Vlanson

128 Contributions
40 People Helped
Helpful to 12 out of 32 people

I’d like to share my story too. Just a few weeks ago i was homeless, i was jilted by my online lover. and he had robbed me of everything i had. By the time i realized i was being played, my credit score was already 458 , i had an eviction on my report and a large debt on my credit. I was on my way to the little corner behind the store where i normally sleep when i saw a fellow homeless person who i met some days ago and he was looking so changed and successful. I immediately began to beg him to tell me how he made it so fast and because i had told him my story when we previously met, he understood my problem and gave me the contact of the hacker that helped him. i contacted the programmer (ex FICO and Experian agent) and he fixed my credit, raised my credit score and cleared all negative listings on my credit in less than 9 days. I would have kept quiet about this, but i won't be able to forgive myself for not helping people who are in terrible conditions like i was. "gmorrison741 @ g m a i l . c o m" is the programmer's email address. I wish you good-luck. Y’all can thank me later. 

1 Contribution
47 People Helped

Yes

Helpful to 47 out of 54 people

I had a credit score of 509 when I was started looking into getting a loan for a car, I put down 3,000 & the loan amount was $15,000. However the interest rate is rather high 18%,. I have not been late on any payments and am coming up on 1 year, I do plan on refinancing. Also in the last 8 months my credit score has gone up almost 50 points.

Reply by
Neribaby95

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1 Person Helped
Helpful to 1 out of 1 people

Where were you able to be financed?

1 Contribution
12 People Helped

OnjRaynee

Helpful to 12 out of 12 people

Was in the same boat as you. Still am. :) Was able to get a loan financed but had to put $800 down. The lower your credit score the more difficutl it will be to find anyone that will finance you at a low rate if anything at all. most institutions shy away from low credit scores of 660 or lower but if you come in with a healthy cunk of change as a down payment then you should get financed. Just be ready for the high interest rates/monthly payments. :) Good luck!

2 Contributions
86 People Helped

Helpful to 82 out of 98 people

yes is possible, but you will not get the best rates available, (even with 5k down) best suggestion is start with saying im putting 1k down and work your way up untill you can get what you want some dealer will finance you with just 1000 down, just dont tell them you have 5k yet .

1 Contribution
10 People Helped

I think yes.

Helpful to 10 out of 11 people

My score wasn't much higher than that and Drive Time aproved me for more than 14k with a smaller down payment. Unfortunately though, lower credit score = higher financing rates. 

1 Contribution
5 People Helped

YES

Helpful to 5 out of 5 people

I did exactly that. $14000 loan with a 22.5 interest rate with $1000 down.

Reply by
licorice77

1 Contribution
11 People Helped
Helpful to 11 out of 12 people

What are your monthly payments?

Top Contributor
52 Contributions
193 People Helped

Consider buying a good used car instead

Helpful to 46 out of 54 people

If you want a car costing 14K, then it must be a compact or some other very reasonably priced auto.  I know you want to improve your credit, but I would try to find other ways such as a much smaller consumer loan for something you need.

If you search around carefully, you can outright buy a pretty decent used auto for five grand.  Keep it a couple of years and work on your credit in less costly ways. 

Top Contributor

Reply by
Vlanson

128 Contributions
40 People Helped
Helpful to 3 out of 6 people

I’d like to share my story too. Just a few weeks ago i was homeless, i was jilted by my online lover. and he had robbed me of everything i had. By the time i realized i was being played, my credit score was already 458 , i had an eviction on my report and a large debt on my credit. I was on my way to the little corner behind the store where i normally sleep when i saw a fellow homeless person who i met some days ago and he was looking so changed and successful. I immediately began to beg him to tell me how he made it so fast and because i had told him my story when we previously met, he understood my problem and gave me the contact of the hacker that helped him. i contacted the programmer (ex FICO and Experian agent) and he fixed my credit, raised my credit score and cleared all negative listings on my credit in less than 9 days. I would have kept quiet about this, but i won't be able to forgive myself for not helping people who are in terrible conditions like i was. "gmorrison741 @ g m a i l . c o m" is the programmer's email address. I wish you good-luck. Y’all can thank me later. 

1 Contribution
55 People Helped

Helpful to 55 out of 75 people

Your best bet is to go to a credit union and get preapproval for the loan, then you know or don't know. I think they offer better rates. We just got a new car, and qualifed for the best CU rates (2.44% for 60 months) and Ford quoted us 5.5%. We are picking the new car up Thursday, and the dealer is going to look into lower rates, though I doubt they will find. 

I don't think you are being unrealistic, depending on why your credit score is low. I have 93% average credit card utlilization (long story, but had a mortgage and rent for a while, sold last month) but have never missed a payment in my life, which is why I think the credit union allowed us the lower rate. I was hoping on paying down my cards first, but my car crapped.  

My brother in law has a credit score in the 580s and got a 12,000 loan after 10% down, though his interest is 14% for that. He was stupid when he was 18-20 and is now building his credit back up slowly. 

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