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I currently have a credit score of 558. Like a lot of teens I got caught up in the credit card game. I am now working to pay off my debts. I have recently gotten a promotion at work and making a decent living. One child later and one on the way I am looking into purchasing a new car. I am currently driving an 07' Ford Escape with 189,000 miles on it.
To put it nicely...ford sucks. My car is rusting away! I have always been good about maintenance. So I am ready for something new and more dependable.
Can anyone tell me what an average interest rate would be for a credit score of 550's like mine? I'm looking at purchasing a used 2014 SUV price range from 20k-24k. I am planning on taking another six months to pay as much debt off as I can and I will have a $3000 down payment.
Can anyone suggest good places to start looking at loans for bad credit and possibly have a ballpark range of interest rates?
Thanks!
I currently have a credit score of 558. Like a lot of teens I got caught up in the credit card game. I am now working to pay off my debts. I have recently gotten a promotion at work and making a decent living. One child later and one on the way I am looking into purchasing a new car. I am currently driving an 07' Ford Escape with 189,000 miles on it.
To put it nicely...ford sucks. My car is rusting away! I have always been good about maintenance. So I am ready for something new and more dependable.
Can anyone tell me what an average interest rate would be for a credit score of 550's like mine? I'm looking at purchasing a used 2014 SUV price range from 20k-24k. I am planning on taking another six months to pay as much debt off as I can and I will have a $3000 down payment.
Can anyone suggest good places to start looking at loans for bad credit and possibly have a ballpark range of interest rates?
Thanks!
There are sharks out there that will eagerly lend you money at 15% to buy a car. Road Loans does a lot of sub-prime auto lending, you might try there. Just remember you are practically selling your soul.
And you'll be upside down for most of the loan, so if you run into illness or job loss you will likely end up defaulting and getting the car repoed, making your credit even worse (yes, it can go even lower...)
A better idea is to hold off on paying the debt down and save $5000 instead of $3000 and then buy an old but reliable mini-van outright. Even at credit card interest rates, we'd only be talking about an additional $2k in debt instead of $20k. A high rate can be manageable if the amount you owe is kept small.
But you absolutely need to get on a written budget and stick to it. Always keep $1k-$2k at minimum in cash for emergencies, and then try to get rid of high interest debts after you get the minivan.
Thanks for you input.
As I am trying to do this on my own without relying on my husband, I am not taking into account his income.
If for some reason illness or loss of my job occurs I have him to help cushion that. I am not so much worried about not being able to afford it but more looking at places that will work with my credit.
There are sharks out there that will eagerly lend you money at 15% to buy a car. Road Loans does a lot of sub-prime auto lending, you might try there. Just remember you are practically selling your soul.
And you'll be upside down for most of the loan, so if you run into illness or job loss you will likely end up defaulting and getting the car repoed, making your credit even worse (yes, it can go even lower...)
And those are buy here pay here guys who are going to sell you a car that isn't going to be in much better shape than the one you have now, plus they love to repo.
Drive your clunker, pay off your debts and soon enough you'll get your score into the mid-600's where dealers can actually find you a decent rate on a new car.
And maybe something a bit cheaper might be worth looking at until you pay off your debts (a $24,000 car is 50% more expensive than a $16,000 car, and it'll cost more to insure, fuel, and register).
I mostly drove Asian compacts until my household income breeched $70k. Remember if your household income is less than $50,000 then you really should keep your car payment below 10% of your income (on a four year note with 20% down). Once you make over $50,000 you'll have more disposable income and could step up how much you put towards a car w/o negatively impacting the other facets of life (food, rent, insurance, utilities, retirement, and vacation).
We have 2 kids under 2. My wife drives a 2001 Lexus ES with 190K miles on it. I could probably sell it for maybe $2500. It is ugly and the cup holders are broken but it runs like a top.
This is the type of car u should buy with cash. It is temporary until you can get out of debt and get your finances in order. A bad car loan can ruin your finances and credit.
Thanks for you input.
As I am trying to do this on my own without relying on my husband, I am not taking into account his income.
If for some reason illness or loss of my job occurs I have him to help cushion that. I am not so much worried about not being able to afford it but more looking at places that will work with my credit.
How's his credit?
He can co-sign (my wife and I do for equality sake).
The bigger the down payment, the better deal you will get. With a low credit score and $3000 down, you're looking at a fairly high interest rate.
Can you put it off a bit longer and built up your down payment? I generally aim for a minimum of 25% down, but 50% down usually nets me 0 to 2% interest rate.
I second the idea of buying an older, more reliable car for now, preferably with cash. Then every month, make the car payment that you'd already planned on directly to an online savings account and work towards buying the next one for mostly cash.
Thanks for you input.
As I am trying to do this on my own without relying on my husband, I am not taking into account his income.
If for some reason illness or loss of my job occurs I have him to help cushion that. I am not so much worried about not being able to afford it but more looking at places that will work with my credit.
Ok, this is easy - live on your income and save every dime of hubby's income for 6-9 months, then buy what you can pay CASH for and keep it until your credit is better. Just be sure to be disciplined. If you need to leave your credit cards at home when you are shopping, so be it (I'm not saying this IS the case, only that if this describes you then you have to do what it takes...)
Can anyone tell me what an average interest rate would be for a credit score of 550's like mine?
I'm looking at purchasing a used 2014 SUV price range from 20k-24k. I am planning on taking another six months to pay as much debt off as I can and I will have a $3000 down payment.
Can anyone suggest good places to start looking at loans for bad credit and possibly have a ballpark range of interest rates?
Thanks!
With that credit rating and $3,000 down, you're buying too much car.
558 is "poor", not "bad" so you can borrow money but expect 10%+ interest rates for a sub-prime auto loan.
If your car dies, you should be buying a 4 or 5 year old low mileage reliable $10,000 sedan that should be trouble-free for a half-dozen years, not a 2 year old $24K crossover. That will put you in a car loan that is short term enough that the interest won't eat you alive. You don't want a 5 or 6 year car loan at 10%+. If you total the car, you'll be upside-down on the loan for most of the term of the loan.
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