Banks and Loans...

[CyberPitz]

From personal experience, how does this stuff work? Like, say I want to buy a car from a dealer/private owner of an older car *1987-1989* and it ranges in the $7k range...Currently, I don't have that money, but god knows I want it. I don't know if I have any credit, I assume I don't. I'm 21, and I've not had a credit card. Only things in my name that are payed monthly are my Insurance..and...that's it I think. If I am correct in assuming that banks are the ones giving out the loans for vehicles and such, would they...:

1.) Give out a loan to someone for that amount of money to buy a car from a private seller?
2.) Give out a loan to some schmo like me who has no credit, but puts in a steady $500ish check into said bank every 2 weeks.
3.) Give out the loan for the car that is that old...?

I'm completely stupid with it comes to this stuff, so that's why I'm asking for what you guys think. I'm sure some of you have gone to a bank for a loan so far, *Stern, and Pi, you're the oldies of the forum, so really, you're the ones to look to for answers, since most of the rest are too young for loans *

But yeah...Just curious. I don't utterly NEED this car ASAP, but I would like to have it before anybody else gets it...

 

[Raziaar]

You give me money... I hold onto it for you. Honest.

 

[Element Alpha]

In my experience, there are two things that enable loans:
-having a work contract
-having someone who will pose as a warrant
(I don't know the exact terms)

Having either one of these conditions should be enough. Of course, they'll check if you have debts, but you said you didn't. The fact that you can morgage the car should lower the interest. I know there are special rules when it comes to second hand cars, and that there's different types of loans. Ask for an appointment. You should try several banks, it doesn't matter if you have an account there or not.

 

[CyberPitz]

In my experience, there are two things that enable loans:
-having a work contract
-having someone who will pose as a warrant
(I don't know the exact terms)

Having either one of these conditions should be enough. Of course, they'll check if you have debts, but you said you didn't. The fact that you can morgage the car should lower the interest. I know there are special rules when it comes to second hand cars, and that there's different types of loans. Ask for an appointment. You should try several banks, it doesn't matter if you have an account there or not.

Call and make an appointment? What would I say when I ask for one or walk in to ask about it? "I'm just wondering about loans for automobiles? Or for cars sold by an individual...man this stuff confuses me.

 

[baron insig]

Just ring and say i would like to discuss the terms for a loan please, whena re you next available ebtween time x and time y

if they need any more info they will ask you

your are making them money remember. You are the customer!

 

[ComradeBadger]

Reading your post, I'd say you should have no trouble in obtaining a loan


Just head in, pick up a leaflet, and then talk to the assistant.

 

[StardogChampion]

I'm going to need to get a loan when I go freelance.

Just remember that banks WANT to give you a loan, because they're going to make money on it...

 

[CptStern]

you need a credit rating to get a loan ..I can almost guarentee you'll be turned down ;( sorry ...not too mention you're too young ..most jurisdictions wouldnt give a credit card to anyone under 18 ..and even then only with a good banking record

best way to get credit rating is to get a credit card ..ya I'm aware of what I posted above

you could always ask your parents to co-sign ..however if you screw up with payments you affect their credit rating as well.

so the bank loan works like this: you get loan, you buy car, bank charges you high interest (10-20%), you fail to make payments, bank takes back car, they sell it at auction, you have ruined credit rating


and now for the parental side of me: ...you want to buy a car that's almost 20 years old for HOW much!?! what about school? who will pay for that? gas? insurance?, repairs? not me! .. you'd better get a better job because no matter how many extra hours you put in stuffing grocery bags at the local piggly wiggly will pay for your "shaggin wagon" mister!

 

[ComradeBadger]

Must be different in the US/Canada, I'm pretty sure you can get a loan with good banking history, and a credit card (with no debt on it)

However, I'm only experienced with student loans :O

 

[CptStern]

ya so long as you have a steady job/good banking history/are of age

 

[ComradeBadger]

He's 21, has a steady job ($500 every 2 weeks he says) and I'm assuming good banking History

So he should be fine.

(I've managed to get a £1000 interest-free overdraft and a new credit card even with being £1250 (nearly $2400) overdrawn and about £200 ($390 odd) on a credit card with another bank - I'm just slick like that.. good with people)

 

[CptStern]

oh for some reason I thought he was 17

his best bet is a credit line ..it's like a loan but you can use the money over an extended period

 

[Pi Mu Rho]

I don't use credit, so I'm the wrong person to ask. If I can't afford it outright, I don't buy it.

 

[Hectic Glenn]

I don't use credit, so I'm the wrong person to ask. If I can't afford it outright, I don't buy it.

This is also my philosophy, however when i'll want to get on the housing ladder i'm pretty sure a significant mortgage will be under my name for sometime considering current (and rising for future) prices. Any other loans i'll avoid, and credit cards are a no no, switch taking money right from my account is how i play it and will continue to.

 

[Fishlore]

Speaking in regards to the US, I guess the crux of the question is, will you be willing to accept a piss poor interest rate? I have no idea how the system works in other countries.

You could be 25, have a high paying job, not a dime of debt and still get a ridiculously poor interest rate. You have to use credit a lot and not screw up if you want a good rate.

About 4 years ago I was 25, not a dime of debt, was making over $50,000 a year, had cut up my credit cards a few years before that and had leased a car for 4 years and never was late on a payment. When I was 29 I still didn't have enough credit built up to get a decent rate on my following lease.

It's a crazy system. My roomate is in the banking industry and has some funny stories about people and how they treat their credit.

EDITED: I forgot to add, a good way to assure yourself that you'll never be able to afford a house or car is to not use credit ever (unless you have a co-signor that has a lot of credit). If you're not using credit, you're not building up your credit rating. As a result when it comes time for a mortgage, you'll be S.O.L.

 

[The Monkey]

Find a muslim bank. They have lower interest.

 

[CyberPitz]

oh for some reason I thought he was 17

his best bet is a credit line ..it's like a loan but you can use the money over an extended period

Credit Line, that term is foreign to me....

 

[CptStern]

oops meant "line of credit"

 

[CyberPitz]

oops meant "line of credit"

Still foreign . So basically, you're saying I won't get one, or if I do, the interest would rape me hardcore?

 

[CptStern]

well the interest rate is set up to rape you ..it's a bank after all

a line of credit is similiar to a loan except you pay the interest monthly instead of yearly, so if you have a zero balance in some months then you dont pay interest on the loan

ok to clarify: you open a line of credit say for $5000 ...over the course of a few months say you use $500 of it ..so if you were to pay that off by the end of the month your total interest accumulated for that month is $0 ..in a loan it doesnt matter whether you spend it, you're still paying interest .

ask your bank, many have student lines of credit ..for example my bank allows students to borrow up to $8000 yearly (but that's tacked on to your student loan)

 

[CyberPitz]

well the interest rate is set up to rape you ..it's a bank after all

a line of credit is similiar to a loan except you pay the interest monthly instead of yearly, so if you have a zero balance in some months then you dont pay interest on the loan

ok to clarify: you open a line of credit say for $5000 ...over the course of a few months say you use $500 of it ..so if you were to pay that off by the end of the month your total interest accumulated for that month is $0 ..in a loan it doesnt matter whether you spend it, you're still paying interest .

ask your bank, many hae student lines of credit ..for exmple my bank allows student to borrow up to $8000 yearly (but that's tacked on to your student loan)

Too bad I'm not going to school. haha. I'm just a 21 working full time. I just wanted to get this car before anybody else did! D:

 

[Solaris]

Too bad I'm not going to school. haha. I'm just a 21 working full time. I just wanted to get this car before anybody else did! D:

I don't think it's a smart moove financially. Save up, take a management evening course somewhere, get promoted, climb the ladder, then buy a better car.

 

[CptStern]

Too bad I'm not going to school. haha. I'm just a 21 working full time. I just wanted to get this car before anybody else did! D:

but if you've been there for awhile and have a fairly good credit rating (you have no credit card so it should be spotless) you should have no problem opening a line of credit ..the interest rates are about the same as a credit card

I have to agree with solaris, dont buy something that will put you into heavy debt ...believe it or not it's actually harder to pay off a loan when you have a car/responsibilities ..if you must have a car for transportation just buy a junker

I drove this till i was 19:

 

[CyberPitz]

but if you've been there for awhile and have a fairly good credit rating (you have no credit card so it should be spotless) you should have no problem opening a line of credit ..the interest rates are about the same as a credit card

I have to agree with solaris, dont buy something that will put you into heavy debt ...believe it or not it's actually harder to pay off a loan when you have a car/responsibilities ..if you must have a car for transportation just buy a junker

Yeah, I have my car now, it's about to die though. The tranny is scratching really bad in 3rd gear, and reverse. The clutch plate is fried, and alot of other things. I'm sick of driving cars that need lots of work on them. I had a Mercury Topaz 1990 prior to my RX-7, and yeah...meh.

I want a car that looks great, runs well, and is fast. How a Sports Car should be.

And I wasn't aware 7 grand was that much in debt..but then again, I'm dumb, so Iunno.

 

[CptStern]

Yeah, I have my car now, it's about to die though. The tranny is scratching really bad in 3rd gear, and reverse. The clutch plate is fried, and alot of other things. I'm sick of driving cars that need lots of work on them. I had a Mercury Topaz 1990 prior to my RX-7, and yeah...meh.

I want a car that looks great, runs well, and is fast. How a Sports Car should be.

And I wasn't aware 7 grand was that much in debt..but then again, I'm dumb, so Iunno.

well it doesnt seem like a lot of debt but when you have to pay for maintenance, gas and insurance it starts to add up.

Ya I know where you're coming from, I had a shitty car(s) for years and years and couldnt wait to get something half decent. If you live at home and dont plan on moving, buy the car ..it's just that cars from the 80's will/can cost a lot maintain ..and most arent insurable because the value of the car is inflated due to it being a "classic"

what car btw?

 

[CyberPitz]

well it doesnt seem like a lot of debt but when you have to pay for maintenance, gas and insurance it starts to add up.

Ya I know where you're coming from, I had a shitty car(s) for years and years and couldnt wait to get something half decent. If you live at home and dont plan on moving, buy the car ..it's just that cars from the 80's will/can cost a lot maintain ..and most arent insurable because the value of the car is inflated due to it being a "classic"

what car btw?

I currently have the same kind of car pretty much, it's a 1989 Mazda RX-7
http://www.rx7club.com/showthread.php?t=506761

The car I currently own is a 1988 Mazda RX-7. I'm sure I'll get insured by this car. Maintenence shouldn't be too much, I pay around 45 bucks a month for gas on my car..probably be more for this thing since I'll be enjoying the lots of extra speed...Insurance currently for my car is 75 bucks. And you said 20ish% for interest? I'm no good at math, how much do you think that would be for 7-8 grand?

*EDIT* bills for me * having 2 other roomates* = out to about 200-300/month

 

[CptStern]

I currently have the same kind of car pretty much, it's a 1989 Mazda RX-7
http://www.rx7club.com/showthread.php?t=506761

The car I currently own is a 1988 Mazda RX-7. I'm sure I'll get insured by this car. Maintenence shouldn't be too much, I pay around 45 bucks a month for gas on my car..probably be more for this thing since I'll be enjoying the lots of extra speed...Insurance currently for my car is 75 bucks. And you said 20ish% for interest? I'm no good at math, how much do you think that would be for 7-8 grand?

*EDIT* bills for me * having 2 other roomates* = out to about 200-300/month

yes but it's not only the interest ..it's also minimum payments that will kill you ...when you buy a new car, you make a payment plan by figuring out how much you can pay per month ..that way you know how much you can afford. Just guesstimate by drawing up a budget of how much it will cost you ..can you pay $300 - $400 a month? well factor in everything else you need money on ..just remember that they have minimum payments and it's usually pretty steep depending on how much you owe ..you gotta talk to a bank

 

[CyberPitz]

yes but it's not only the interest ..it's also minimum payments that will kill you ...when you buy a new car, you make a payment plan by figuring out how much you can pay per month ..that way you know how much you can afford. Just guesstimate by drawing up a budget of how much it will cost you ..can you pay $300 - $400 a month? well factor in everything else you need money on ..just remember that they have minimum payments and it's usually pretty steep depending on how much you owe ..you gotta talk to a bank

Well, my roomate went to my bank to get a loan on a 1988 Convertable RX-7 for sale in town, and they only said he can have 2100 since teh car is old. Something tells me I'll get the same fate

Maybe I'll try to get more money for a 1993ish RX-7 3rd generation. Those are hot