Do you think I'm illegible for a loan? Really like some input?!

  • Posted by a hidden member.
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    Mar 10, 2012 2:06 PM GMT
    Trying to get a car loan so I can get my license so I can get somewhere in life.

    Here are my stats, I'm 19. I work part time. 15-20 hours a week bringing anywhere from $250-$300 a week.

    I have no prior credit history what so ever.

    Because of my mum I'm $3000 in debt to the government, which I only have to pay $10 a week off, it doesn't affect my credit history and it doesn't collect interest. It's hard to explain but it's not a loan or anything, just an account where they gave me too much money so I simply pay it back.

    I live at home rent free.

    I have no savings, because I always spend it because I hate saving money.

    I pay for our phone/internet bill at home, it's $80 a month. It's not on a contract. But they still deduct $100 a month, and I've never missed a payment.

    My total expenses would be around $250, and I usually bring just over that. So I can afford it, that's including petrol, food and all that.

    I live in the country, which means there are practically no good opportunity. If I get my license I can travel, and have been rejected twice on the notion that I don't have my license from possible job outcomes.

    I did a pros n cons list, it was like 20 pros to 2 cons.

    I really want this, more than anything.

    I think the only problem would be I don't earn enough, and that I have outstanding government debt.

    Ummmm, yeah. Writing this, it sounds bad haha. But I believe I can do it!
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    Mar 10, 2012 2:12 PM GMT
    In the US your chances for being "eligible" for a car loan would not be good, except at ridiculously high interest rates, that would soon result in a repossession. Are you factoring in car insurance? Even if it's not mandatory in Australia it really is essential before you take a car out onto the public roads. For your own protection as well as others.

    Don't mean to be a downer, and I'd love to see a cute thing like you get a car, which would increase your chances for more income. How much does a car actually cost there that you would consider?
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    Mar 10, 2012 2:20 PM GMT
    Yes, all my expenses as such would include insurance. Everything.

    A car over here, that i'm after. Like a 2002 commodore, with under 100,000 km's. Would be like $5,000. But you can find something newer than that. That's just an example. The repayments would be $40 a week, with a %10.00 interest rate. The total amount payable for a 5 grand loan would probably end up like 7 grand for a 5 year loan.
  • CuriousJockAZ

    Posts: 19119

    Mar 10, 2012 2:58 PM GMT
    Do you have any relatives that have an old car they are thinking of trading in that perhaps they would give you or sell to you and let you make payments? Is there any chance your parents would co-sign for a car so that you can obtain one, or maybe loan you the money to buy an old used car cheap?
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    Mar 10, 2012 3:03 PM GMT
    Given your age, this is the time to start building credit. If you already know your outgoing expenses, pick one of them like gas and use a credit card to pay for it then pay off the credit card in full every month. Don't think of the credit card as free money - think of it as a tool to eventually help you secure auto and home loans.

    Also - start saving. If you don't have savings, you're screwed in the event of job loss or injury. Even if you have insurance, if you're unable to work because of long-term disability (1 in 3 people at some point in their life will have to take extended time off work due to illness or injury), you'll need a safety net. The general rule is to have at least 3 months of expenditures saved up - if you spend $250 a month, save at least 750...1500 to be safe. Start saving. SAVE SAVE SAVE. If you're only spending a week's work of income every month, you should have a substantial savings by now.

    I set up a personal savings account with American Express and it automatically transfers money from my checking account every pay-day. I didn't start saving very well until I set this up.
  • HndsmKansan

    Posts: 16311

    Mar 10, 2012 3:05 PM GMT
    Might be challenging at this point. I'd suggest your parent cosign a car note with you, but not sure how your parent(s) credit would give you support.

    Credit is a very (VERY) important thing in life and having a good credit rating begins early. When you do get your first credit card or loan, pay it off according to terms or before.

    My suggestion is to talk to a reputable car dealership about their criteria.
    Be honest, upfront and candid about your situation. All they can say is "no" and even if so, they may share pointers about how you can better prepare.
  • Posted by a hidden member.
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    Mar 10, 2012 3:06 PM GMT
    Kristoff said


    I have no prior credit history what so ever.
    Get a store credit card (easier to get than a bank card) and charge about $100 on it, and pay it off in 2 payments. Repeat every few months or so. Don't by BS...buy clothes you need anyway.



    I have no savings, because I always spend it because I hate saving money.
    Stop that!!
    You better begin saving some now to get in the habit. If possible, have it taken from your paycheck before you get to spend it. Even $5.00 a payday!





    I really want this, more than anything.
    IF you really meant that, you would begin saving money!

  • Posted by a hidden member.
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    Mar 10, 2012 3:25 PM GMT
    loans: the road to financial slavery (yes, I am taking one)
  • Posted by a hidden member.
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    Mar 10, 2012 3:31 PM GMT
    Kriftoff, shouldn't you be asking a bank this?

    curious,
    -Doug
  • Posted by a hidden member.
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    Mar 10, 2012 3:33 PM GMT
    Not sure how things work over there. But, here loans aren't standardized. So, if you go to a bank in an area where people are less financially responsible you have a better shot at getting a loan. You may have to go to multiple banks though, because it depends on the Loan Officer.

    That being said, be careful. Debt sucks.
  • Posted by a hidden member.
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    Mar 10, 2012 3:59 PM GMT
    I knew this was a Kristoff thread the second I read the headline.
  • BIG_N_TALL

    Posts: 2190

    Mar 10, 2012 4:02 PM GMT
    GreenHopper saidloans: the road to financial slavery (yes, I am taking one)


    Don't forget credit cards.
  • Posted by a hidden member.
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    Mar 10, 2012 5:04 PM GMT
    Not sure how it works in Oz, but here in the US, a first-time loan would be possible. But it would depend on what type of dealership you worked through and the banks they do business with. Your interest rate may be a bit higher, but they would still structure your loan with payments that you can afford.

    Are the phone/internet in your name? If so, that could count as "credit", to some degree (though not sure why it's $80/month and they deduct $100/month).

    It's very common for people your age to not have credit and banks are very aware of that. I would highly suggest that you look to purchase the car through a known, reputable dealership and not a private seller or a small car lot on the corner. The larger established dealerships have networks of banks with whom they've worked and will know what each bank's criteria is for approval. At the same time, the banks know that the dealership will do what they can to make sure it's a feasible deal.
  • FredMG

    Posts: 988

    Mar 10, 2012 6:32 PM GMT
    I'd say:

    Start putting 10% of your paycheck into savings.

    Buy a bicycle and use that back and forth to work if practical.

    Maybe do some thinking about why a car and a license are needed to "get you someplace in life"

    I didn't own a car until I was 30, road my bike everywhere even when I lived in places like Virginia which (at the time) had drivers out to kill cyclists to "teach them a lesson"

    If not a bicycle, how about a Motors cooter? or an Electric Motorcycle? Even in Rainy Oregon that's a viable mode of transport year-round.
  • sloughwest

    Posts: 210

    Mar 10, 2012 6:46 PM GMT
    Get licence...

    Apply for any and every job with company car icon_smile.gif
  • Posted by a hidden member.
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    Mar 10, 2012 6:48 PM GMT
    From personal experience, you're better off paying for a car outright than financing for a car.

    If your family can't give you car that's perfectly understandable as everyone isn't in the best financial situation these days to afford to do that but, I would say save, save, and save for a 2nd hand car that's been inspected and in good working order rather than buy from a dealer.

    If you want to establish credit try a secured credit card and go that route that way you aren't going to end up in huge debt.

    I was at a time over 19k+ being young and reckless and if I could say I would do it all over again and not feel like I was a slave to the system of bill paying then I would have never taken on any debt whatsoever.

    Be smart man, best of luck, and if you have any questions shoot me a line.
  • Posted by a hidden member.
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    Mar 10, 2012 7:45 PM GMT
    Topic title!
    tumblr_lgbzoohtKF1qaleq1.gif
  • Posted by a hidden member.
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    Mar 10, 2012 8:03 PM GMT
    Well, you are clearly not qualified to fill out a loan application.

    Tell ya what - I'll buy you a car. Any car you want. Free and clear.

    But ya gotta drive it off a cliff.

    Deal?

    *crosses fingers*
  • Posted by a hidden member.
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    Mar 10, 2012 8:05 PM GMT
    yourname2000 said
    JPtheBITCH saidYou're not illegible, darling.
    Just the post.

    No doubt...he probably asked the bank for "a lawn".....and of course they said "no". icon_lol.gif


    Of COURSE they said NO!!!

    In this economic climate banks can't just give Cat Lawns the way they used to.

    icon_rolleyes.gificon_rolleyes.gificon_rolleyes.gif
  • Posted by a hidden member.
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    Mar 10, 2012 11:07 PM GMT
    JPtheBITCH saidYou're not illegible, darling.
    Just the post.



    hahahaha! The coffee I was drinking came out through my nose, laughing.
  • Posted by a hidden member.
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    Mar 10, 2012 11:15 PM GMT
    Um, here's the worrisome bit:

    I have no savings, because I always spend it because I hate saving money.

    if you were a lender, how would this applicant sound to you?
  • Posted by a hidden member.
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    Mar 11, 2012 1:40 PM GMT
    Over here in the USA Credit all boils down to what your FICO score is( google is your friend). EVERYTHING from car loans to house loans use FICO scores to see what kind of risk you are. You can get yours online some places charge for it, but again I don't know how agencies report in your country.
  • Posted by a hidden member.
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    Mar 11, 2012 1:43 PM GMT
    I read somewhere that banks won't give loans to people who are illegible.
  • Posted by a hidden member.
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    Mar 11, 2012 2:15 PM GMT
    Are you a member of the Co-operative Group there? You might want to talk to them and see if you can qualify somehow, or learn the steps you'll need to take to get a loan.

    http://www.co-operativebank.co.uk/servlet/Satellite/1199261362022,CFSweb/Page/Bank-CustomerServices
  • djzilla

    Posts: 138

    Mar 11, 2012 3:08 PM GMT
    I would recommend joining a credit union. I think you would have a better chance than at a bank (and I work at a bank! lol)

    Also, for your first car....you're 99% more than likely going to need a cosigner. It sucks but for some reason no matter how high your credit score, they won't let most people get a loan for a vehicle without someone who has already had a car loan on their credit history.