Question


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Was denied for an auto loan from my bank, what now? Part 2?

I received a few good answers but was told that I left out key info and wasn't able to sit around and edit, so I'll repost. FYI, some people said I would only qualify for $100 a month auto loan and that is false. I know from previous research that the debt to income ratio is much higher than that. I make about $1300-1400 gross per month and about $1000 a month after tax, with zero debt. No student loans, only about 3% of my credit limit is in use, at 0% interest, and I have over $20k in limits, not including my card with no credit limit (NPSL card, no preset spending limit). Here is the data: 1) Two years of credit history 2) Four credit cards 3) Over 20k in limits 4) Never missed a payment and my Fico is around 750 5) Good usage of my cards. I have charged thousands in one month and paid it off. 6) Was looking to trade-in my vehicle and put down some money. In total this would be around $10k. 7) Wanted to finance a new BMW 3 series, being sold $6k below MSRP, plus a $2k credit, plus my downpayment, meaning the bank would finance about 70% of it's MSRP. Was still denied, even though I have a long history with this bank (over 10 years) and keep a good amount of money in my accounts. Was I asking for too much? Do I need a lower loan amount (was asking for about $30k) or will I need a cosigner no matter what, since I've had no previous auto loans or any installment loans? Ok. I don't have bills. I already have insurance quotes and it will only be about $80 a month. I'm a COLLEGE STUDENT, living with family, and have no overhead. I currently make $1,000 AFTER TAX, which the debt to income ratio isn't based on, and even then this payment with the auto would be about 40% of my post tax income. That is not a high debt to income ratio. In my other post, I pointed out that my income is going to increase in a month to over $20k, as well. Not to be rude, but I don't want to hear buy a this car or that car. I'm asking about how the finance process works.

1 month ago - 6 answers

Best Answer

Chosen by Asker

I don't think it's the lack loans that is hurting you. (mixture of credit) I achieved 800+ scores just by using credit cards and paying in full. I make a whole lot more than you do - to say the least. My car is a new Nissan Versa that cost me $9,800. Do you really need a new BMW? /

by Judy

1 month ago

Asker's Rating: 

Other Answers

Like I said before, you are going to be asked to get a cosigner. A 30k car on your salary per year? You are living beyond your means. Doesn't matter if you have no other bills.

by My Take on It- 1 month ago

You make a $1000 a month and you want a BMW? I made that much back in 96' and barely could afford a Saturn. Forget it.

by michael a- 1 month ago

your income just won't support that much debt. What about rent? Insurance?

by Common Sense- 1 month ago

You can't afford a 30K car on your salary. While your credit score is good, your credit history is short. Your income is pretty low as well. You may be able to finance 10K if you have no other debt. Your best bet would be to get a car you could pay for in cash or maybe only finance 4-5k until you have a couple more years of credit history. If you must try, a credit union may be more helpful but I doubt they will finance 30k. Are you about to start a new job? Wait until your income increases and you have at least a year on the job to apply. Banks still won't like your income at 20k on a 30k car. They know you don't plan on living with your parents forever. A 3-5 year car loan will put these payments way above the level you are quoting. The bank will want your debt to income to max around 35-40%. They want this to include housing as well(even if you live at home now).

by timothy p- 1 month ago

You're a college student making $1400/mo gross and you want to finance a new BMW. That's totally unrealistic. Have you checked into how much just the INSURANCE will be for that car?

by jlf- 1 month ago