Need a miracle

[helot13]

Recently discharged C7, have already taken out a title loan, got a line of credit from my CU, and have a secured credit card to begin the process of rebuilding. Trying to find a car loan, but here's the rub. All of the lenders for car loans are only offering a limited inventory and I do not want to go into 8-20,000 in debt just to get into a car. I have a specific car in mind, but the CU I am working with has a hard time underwriting a vehicle as old as I am wanting to get.

The thing is, I know a lot about cars. I understand that a car's value is not as easy as year make model and miles. Certain vehicles are known to be reliable and remain in demand 10-15-20 years later. The bank has hard and fast rules about this. They have pre-approved me at $4000 and even though I found a vehicle for half of that, they are unable to get the deal done.

Long story short, I am finding it impossible to find an unsecured loan for $2000 with FICO under 580 and a recent BK. I have seen several sites that are basically lending referral sites, but a lot of them seem like scams and I have not seen any reference to them on boards like this or at myfico or others. Am I simply chasing a bigfoot unicorn alien ghost?

[justbroke]

I would wait to get that discharge seasoned some more. You will have a hard time until your scores are likely near or above 620. I was successful about 6 months after discharge. Most automobile loans won't write for less than $7,500 in most States (with some that will go down to $4-5,000). The only other option is an unsecured personal loan, which will be difficult.

If you can clean up your report and get some distance on your report, you may be able to get into a credit union that weighs your income (and relationship with them) more than your credit score. I personally know that CUs like Navy Federal are generous in that regard. I know that other CUs of which I was a member, were much more strict (not so much discretionary).

What did you do with the line of credit from your CU? Why not just get a PLOC (personal line of credit) for $2,000 and purchase the car outright. Maybe need to shop this at another CU, but that 580 is really low.

[leonel9]

For what it's worth, Navy Federal generally looks for 6 months of credit composed of 3+ accounts after discharge before they will approve a loan, and 1 year post discharge for an unsecured credit card. There have been exceptions to this, but that's the general rule.

Navy Federal will finance older vehicles, but at a higher interest rate (the loans are called Personal Expense Loans w/Collateral).

As justbroke said, it sounds like you need more time.

[leonel9]

Forgot to mention: Have you pulled your credit report from all three bureaus, and ensured everything is reporting correctly (e.g. BK shows as discharged, and no accounts are reporting as delinquent)?

If so, you may want to try Capital One Auto Finance. If qualified, you can get a pre-approval online without a hard inquiry.

[helot13]

Yes, One of the first things I did was pull all three credit reports, disputed the obvious errors then took out a title loan to get the ball rolling again. My CU offered me the LOC ($300) so I took that as well. I then got a secured credit card with the $300 LOC which will be paid back 95% with the meager tax return. I then delved into my credit scores and was able to get free access to the 3 Vantagescores and the 3+ FICO scores by asking the right person politely. I found major discrepancies in the numbers. Low range was 507 and the high was 680. After a lot of pestering and diligence I was informed of one item on the TransUnion data that was causing a 60 point drop in FICO score which I am in the process of rooting out. I imagine in 6 months the scores should be around 600 if not more if I keep playing the game correctly.

The real issue is, I have one car that is difficult and expensive to repair and could lose functionality at any time. My wife is in school for another few weeks and once she is out she should be able to find decent paying work. The trick is, right now we drive the kids to school, then I walk to work from there and she takes the car to school. We have it figured out. If the car dies, this will cripple our ability to get everyone where they need to be. It would be nice to get a second car so the wife can go to interviews and get to her job without putting additional pressure on the transportation dynamic.

What is bothersome is the rigidity of the underwriting process. I have pre-approval for $4k, and given my debt to income could likely get 10 or 20k, but I don't want that debt. Not right now. I just want a halfway decent car that I can work on that I can trust will last for a while. I have found a few, but the bank cannot see past their policies to just give me a check for $2k. Yes, I understand their position, but c'mon now.

I don't even care about the interest rate. Charge me 30%. It's only 2k and I will pay it off way early once the wife finds work. I just need the cart before I get the horse.

What amazes me is the method of valuing a vehicle. They use NADA and that is the determining factor. They will accept a dealer appraisal, but they want to charge for that, but here is an example of why this is not an accurate way to value vehicles. I don't know if you know anything about cars, but a 1969 Chevy Camaro is one of the most sought after classics of all time. NADA values this vehicle, regardless of condition at $12,950. There is a version of this car that went to auction for $400,000.

Just sayin'.

The car I am looking for is valued at $1250 and they are only going to finance 110% of that, but the real issue is they want it registered at the time of sale, so on top of the 2k they want the taxes, the fees, and the finance charge outside of the loan. In total they want me to bring $500 to closing. Fine, but I don't have $500 liquid right now. I have sold everything I have of value, and aside from giving blood have no other option. I can't borrow from friends or family, I am on an island by myself and simply trying to leverage to get ahead of the game. I can accept it if I have to wait 6 months and save and do the rest, but I am a smart and determined guy who will keep plugging until I get what I want.

I burned Capital One and LendingTree so am shy about asking them for funding. Avant does not lend in Colorado, and none of the other peer to peer lending sites accept at this low of a score or with the BK. Aside from a loan shark I have not found an option to get the $2052.36 I need to get the car I want. Friggin pocket change.

Now that I am fully sidetracked, I would like to get back to the original subject of this post. Do the lending referral sites work or are they all scams?

[leonel9]

I have heard, but not experienced, that you may have your credit pulled multiple times when using some sites. Of course, some may be scams but sites like Lendingtree are legit.

I would still try Capital One Auto Finance. The application will not result in a hard inquiry, so the worst that could happen is they tell you know. I've heard Capital One is BK friendly, including to those who have burned them. When I used their calculator the lowest I could calculate was $4,000. Not sure if that's the minimum or not.

I'm assuming you don't have a 401(k) that you could get a loan from?

[helot13]

I loaned against my IRA in order to give my son a decent birthday. I literally have nothing of value left. One of those long tales starting with the economic crisis. I tried really hard for a long time to avoid the BK, got some bed advice, made some spurious money decisions, but whatever. It is what it is. I was offered a new job which would have allowed me to cash out the IRA. The way the loan works is you have to have 2x the balance of the loan in case it is liquidated. If that would have happened I would have come away with a few hundred before the tax issue. Instead they went into a hiring freeze so I am waiting to hear about the new job still and further waiting for the transmission on my car to give up fully.

The most annoying part is I could get financing for a car without a problem and for very little down. I just don't want to get into most of the vehicles these places have in inventory. I want a car I can work on. I want a car with a history of reliability and aftermarket support. Cars are a waste most of the time, and I have zero desire to pump tens of thousands of dollars into a depreciating asset. If it means waiting 3-6-9 months so be it.

I may try Cap1, but again there is probably some money down and it always gets more complicated than a mere monetary transaction. I mean there is always the option of the Buy Here Pay Here sharks, but I am trying to make the best decision possible.