I have been looking at accouple different banks inorder to find a decent interest rate for a loan. My problem is, I have no credit score. Each bank has told me that I dont have bad credit, I just dont have enough credit to give me a decent score. Thus each bank has given me an Interest rate of 16.5%. The best deal I have been able to find is 14.5% on a $10,000 auto loan for 3 years. I need to buy a truck because I will be in the states for about a year before I deploy again. I am looking to buy a newer used truck with low miles on it. The problem is the 14.5% interest rate. Would it be smart to take that loan, pay it regularly for 6 months or so and refinance after 6 months to get a better rate? Does refinancing go against my credit score? I realize I could get a credit card and pay that off for 6 months to get a better credit score, but that would leave me stranded for 6 months. Has anyone else ever run into this problem? Before this I had always worked overtime and saved up enough cash to buy whatever I needed. The way I figure it is, I have to pay more, inorder to get a credit score. I was just curious if anyone else has had to do the same thing. And is refinancing a good thing to do after 6 months of paying off the loan? Thanks for your help.
Loan question
- Thread starter 91KDX
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tony91
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- Jan 30, 2002
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When you refinance, you basically buy another loan to pay your existing loan. I'd be surprised though if any decent lender would give you a better rate with only 6 months of history on an auto loan. You also have to consider if there will be any fees. If there are fees, will they cost you more than the loan with the existing rate. The best option is no loan at all and find another solution. If you must buy a loan, get one with the shortest duration you can afford.
Last thing, read absolutely every document you sign front to back. These folks are doing you no favor by selling you a loan. If they can make a few extra dollars on your tough situation, they will. And if they take issue with you reading your document, walk.
Last thing, read absolutely every document you sign front to back. These folks are doing you no favor by selling you a loan. If they can make a few extra dollars on your tough situation, they will. And if they take issue with you reading your document, walk.
I'm with Tony.. Find another solution to get some trans.. Find a decent POS truck in a used lot.. $1500 or so, just to get you around for that year. You'll be better off in the long run.
Then get some sort of credit card to get your credit history built.
You should be able to get a Sears card or some other store card pretty easily. The interest is high on them, but they're easy to qualify for as a first time borrower, and a Sears card is a good way to buy tools to fix that $1500 truck!! WHOOT!
Just be smart, and pay it off!!
Then get some sort of credit card to get your credit history built.
You should be able to get a Sears card or some other store card pretty easily. The interest is high on them, but they're easy to qualify for as a first time borrower, and a Sears card is a good way to buy tools to fix that $1500 truck!! WHOOT!
Just be smart, and pay it off!!
junkjeeps
LIFETIME SPONSOR
- Nov 24, 2001
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I'm going to have to agree with the previous posts. Buy a beater to drive for six months while you buy gas on your new credit card that gets paid off monthly. Then trade/drag the beater in and upgrade to something a little nicer. In the six months you're waiting "pay yourself" the truck note and use that money when you upgrade. If is was me, I'd buy a little nicer beater and repeat the process every year until you get something nice enough to suit you. Then you don't need a loan at all.
Theory is you shouldn't finance toys or anything that depreciates - those items are cash only. If you can't pay cash, you don't need it.
I just reread your post and realized you may be gone again in 1 year. You won't take such a bad hit on an older truck when you go to sell it. Depreciation is a mother. The service doesn't have some kind of credit union that gives loans to active soldiers?
PS - Thanks for serving our country!
Theory is you shouldn't finance toys or anything that depreciates - those items are cash only. If you can't pay cash, you don't need it.
I just reread your post and realized you may be gone again in 1 year. You won't take such a bad hit on an older truck when you go to sell it. Depreciation is a mother. The service doesn't have some kind of credit union that gives loans to active soldiers?
PS - Thanks for serving our country!
- Thread starter
- #5
The service offers Veteran Assistance, but that is a completely different monster all in its self. My last vehicle I had was a $1500 beater, but when I left home I let my brother use it, and it got pretty beaten up, which is fine, I really didnt care too much at the time. It still ran great when I got it back from him. But I ended up selling the truck to a buddy of mine who wanted it when I left for Iraq. I reckon I dont have to buy anything just yet. Im going to go home and spend accouple of weeks with my folks, I will use that time to figure out what I can do. I am planning on getting a credit card from a bank back home. So I will use that to build my credit for awhile. Does refinancing go against your credit score? Is it a bad thing to do? If I got the loan, and a credit card, paid both off in full each month, and then refinanced would I be able to get a better interest rate? Thanks for you help!
Refinancing wont exactly go against your credit score. If you do it a lot it probably will. Banks might even have rules on how often they will re-finance you.
If your parents are willing, ask them to "co-sign" on a car loan for you. I just took a loan out on a used vehicle for 4.75%. So I know for a fact you can get better than %15. As a serviceman I know for a fact you can join a credit union. Become a member. They will give you loans at better rates, with no fees and no penalties for early repayment. Stay as far away from US Bank, Wells Fargo, etc. , go local.
Short term there isn't much you can do to increase your score. I would take out 1 or 2 credit cards, use them monthly, and pay them off! If you end up living somewhere, get some utility bills in your name.
If your parents are willing, ask them to "co-sign" on a car loan for you. I just took a loan out on a used vehicle for 4.75%. So I know for a fact you can get better than %15. As a serviceman I know for a fact you can join a credit union. Become a member. They will give you loans at better rates, with no fees and no penalties for early repayment. Stay as far away from US Bank, Wells Fargo, etc. , go local.
Short term there isn't much you can do to increase your score. I would take out 1 or 2 credit cards, use them monthly, and pay them off! If you end up living somewhere, get some utility bills in your name.
