$6000 loan possible with bad credit?

[namkablam]

I'm currently in a consumer proposal that started in May 2009. Payments are $130 a month, I have not missed a payment. My only debt is what's left of my proposal which is about $6000. I was really stupid with credit cards and my credit is paid for it.

 

I'm slowing rebuilding my credit. I was able to get a $500 secured MasterCard with People's Trust in October. I've been using it for small purchases each month and paying in full on time every month as the statement comes. I checked my credit report and score in November. My report is clean, everything is correct and all accounts reporting accurately. My score was 460.

 

I want to get a motorcycle this spring/summer very badly. The bike I want is $6000. Is it impossible for me to get a loan either through the dealership, a credit union or bank? I'll have $2000 saved up by April. Will a large down payment allow me to get this loan? Should I just keep saving and get a cheaper bike in cash?

 

Thanks, just trying to figure out my options! I've learnt a lot from this site!

[Stu.Padaso]

With 2 grand down on a 6 grand purchase it shouldn't be difficult to finance. But I honestly have no idea what these consumer proposals do to your credit report.

 

I do work for a car dealership and have been around auto dealerships my entire working life.

 

I think your best bet would be to check out the financing the dealership has to offer you. They'll try to get you the best rate, but you have to watch out. Most big dealerships get kickbacks from lenders so you might not get the rate possible.

 

It might be minor, but let's say BMO approved you at 8% and TD approved you at 8.25% (all rates pulled directly from my flowers). TD might be offering the dealer a $500 bonus for each auto loan and BMO might offer $200 to the dealer. Who do you think the dealer is going to push on you? Chances are they won't even tell you about the BMO approval with the lower interest rate and just set you up thru TD. You won't see a penny of that kickback to the dealer and a lot of dealers will just deny that they are getting one.

 

BUT...by going thru them at least you'll know where you stand credit-wise without having to do a bunch of apps yourself. If they get you approved with one of the big lenders then you're golden. If they have some difficulty with the big lenders so they have to go out and get you approved with some sort of B lender then you know your interest rate is going to be high and the A lenders didn't want to touch you.

 

Don't worry about the bunch of inquiries on your credit report and hurting your score. From what I understand EQ and TU will only hit you with 1 INQ because it'll be obvious you were shopping for a vehicle.

[Handsome Rob]

Hey Stu!

 

I don't want to thread-jack, but any idea where I stand? 611 right now, in 6 months I'm guessing that has to be up a little bit. One big collections for $1500, one derogatory $1500 Visa, I'm hoping both will end up getting yanked.

 

Looking at a range from $12,000, 2008, <40,000 Km, to $17,000 new. $2-4,000 down.

 

Really hoping for a shot at something like $3,000 down, $10,000 financed, ball-parked at $200-250 per month over 48 months depending on rate obviously. Household income is $4500 month, rent is $690, 3 years at job and residence.

[Stu.Padaso]

Hey Stu!

 

I don't want to thread-jack, but any idea where I stand? 611 right now, in 6 months I'm guessing that has to be up a little bit. One big collections for $1500, one derogatory $1500 Visa, I'm hoping both will end up getting yanked.

 

Looking at a range from $12,000, 2008, <40,000 Km, to $17,000 new. $2-4,000 down.

 

Really hoping for a shot at something like $3,000 down, $10,000 financed, ball-parked at $200-250 per month over 48 months depending on rate obviously. Household income is $4500 month, rent is $690, 3 years at job and residence.

I really can't help you Rob. I would if I could, but I'm the IT guy. Or as I refer to myself - the resident nerd. I'm not very involved in what's acceptable for financing and what's not acceptable. The only thing I do in the F&I office is get that prehistoric pin printer working again. I used to work as the bookkeeper at a dealershup for about 200 years, and even then I didn't really know what happened out on the showroom floor. The deals just crossed my desk and I did the paperwork. After a while it's just paper. I quit that job to go into business for myself. That lasted about 5 years, selling computers out of my basement. Then the boss heard I was out of business, called me, and said he needed somebody 2 or 3 days a week to just come in and administer the network and look after the website. Word kind of got out over the next few years, now I have a handful of dealers I do work for.

 

All I can say is to let the F&I guys do their work. It's rare that they can't get people financed. Yes, sometimes there will be a deal go thru that's financed thru some low lender that have 20% and more APR, but they do their best and that's the best they could do with that specific customer. But it's even more rare for somebody to walk out without acceptable financing. We have people who we CAN get financed, but it's thru a low lender. They'll storm out and claim we're trying to screw them. So they go shopping at other dealers, and quite often they come back a week later after realizing nobody else could get them decent financing either.

 

I should add that I am self-employed so I do work for a handful of different dealerships from a couple different manufactures. There is one dealer that I would absolutely NOT give them my personal info so they could shop my app around. No way. The F&I guy looks too slimy. But the BIG dealership (where I was the bookkeeper) I know they're on the up and up and I would trust them to do what's best for me.

 

So my advice to you would be to go to a dealer that has a good reputation and you feel you can trust.

 

EDIT. And don't be embarrased about giving any of the required credit info to the F&I guy. If it's a big city dealer, trust me, they've seen it all. No, they won't laugh at your score or judge you. Most car salesmen/F&I managers have no-so-great credit either.

Edited January 17, 2010 by Stu.Padaso

[Quasei2]

I think it's entirely possible as well. Auto loans are different than walking in for a line of credit or a credit card since there's collateral attached.

 

I also agree with Stu. Even at the bank don't ever be embarrassed. You'd be surprised at the insanity that walks through the door. I had a woman have a complete screaming breakdown on me the other day because we closed her Visa when she included it in her bankruptcy a few weeks ago! How dare we! Poor thing really didn't have any idea what the bankruptcy meant for her finances right now let alone her future financial picture. Really sad situation, but just one example of many to show you never ever be embarrassed because your bank has seen it all. It saddens me how few are even aware of what their credit history looks like so someone like you who actually knows where he's starting from right now would be refreshing.