Personal Loan before Auto Loan

[rileysoldier407]

Good afternoon all,

 

I was hoping for some advice in regards to the most beneficial way to go about this.  I am offered a personal loan by AMEX with a 8% APR interest rate.  I currently have two other personal loans with a much higher interest rates which would be paid off by October of this year if I leave it as it is, or pay them off early through my tax refund.  I am looking at purchasing a new vehicle in May of this year and my utilization on my CC is right around 35%, if I take the AMEX loan, or my tax refund it would bump my UTI. to around 22% and would also actually help my DTI which is at 28% right now.  I know that Amex wont HP for the loan, so I would not add a Inquiry to my report ( I have 3 in the last 24 months across all three CRs). I am just wondering, curious how much it would negatively affect me with adding a new account/ lover my average age account that sits at 6yrs and 5months right now? I would think paying off two loans, bringing down my CC debt will give me a boost of my FICO score, right now around 710-720 across all three CRs auto enhanced.  Really just worried that seeking new credit four months before applying for a auto loan is a bad thing to do ? 

 

Really would appreciate all input

[MarvBear]

We don't care how many inquiries you have.  We do care about your overall DTI And your credit report is not a reliable indicator of overall DTI.

 

What is the high credit amount on your highest installment loan, and how long has that line been open?

[rileysoldier407]

I have one installment loan with a payoff amount of $2000 and the other one with $2300. My car will be paid off in April, it was my highest with 29k. The two personal loans have been open for 3 and for four years, high amounts added together in the beginning was around 11k. If I consolidate those in the new loan it would bring my DTI down.

[MarvBear]

If you can get yourself to an ~85% advance you should get a decent APR considering your previous BK 

[rileysoldier407]

Sorry..I dont have BK on my report. I was just wondering if it could hurt me for my auto loan application in April if I take on a new loan with a lower payment, lower APR to pay off two existing loans with higher APR and substantial higher monthly payment

[rileysoldier407]

I apologize Marv, I guess in a nutshell I am asking if lower DTI is more favorable than the ding on my report for a new account, keep in mind that the other two installment loans would be paid off and closed.

[MarvBear]

Sorry about the BK error.   I was in looking at another thread.

 

NO,  it's my personal opinion it would not hurt you to do what you are proposing.  Again I apologize for the BK reference..

[MarvBear]

18 minutes ago, rileysoldier407 said:

I apologize Marv, I guess in a nutshell I am asking if lower DTI is more favorable than the ding on my report for a new account, keep in mind that the other two installment loans would be paid off and closed.

I always prefer lower DTI,  It will score higher on anyone's internal score card in your favor.

[rileysoldier407]

I figured you were, thanks Marv..I think I will go ahead and do that. It does make sense to me and hope it works out..again I appreciate it and hope.you enjoying the weekend.