August 19th, 2005, 11:51 AM
So. I find a car I like. I called the bank to discuss financing options. Guess what? I won't qualify for any loan with them AT ALL because my Debt Servicing Percent (or something like that) was over 30%.
They will only give me a loan if all my debt and living expenses can be paid in under 30% of my income.
So...no car for me. I can't afford the financing rates per month that dealerships offer so...
That means I stand the possibility of loosing my job now. What a crappy day this is turing out to be.
August 19th, 2005, 12:13 PM
You can't get a co-signer?
August 19th, 2005, 01:39 PM
The days of banks making exceptions on personal loans are just about, if not totally, gone. Credit decisions at the major banks are almost solely formula based. Your options are any and all of the following: (1) choose a lower priced car; (2) look for a low priced used car (banks will generally only go 2 to 3 years amortization on a used vehicle); (3) see if you qualify for a lease; (4) find a co-signer / guarantor; (5) go to all the banks / credit unions / finance companies to see if you can get approved.
Hope it all works out well.
August 19th, 2005, 02:19 PM
Dealerships seem to be able to pull financing out of a hat!!
I know people who have very bad credit (bankruptcy) and lots of dept, who the banks basically laughed at, who went to the dealership and were financed no problem.
So many dealing directly with the dealership, would be your best option :)
August 19th, 2005, 02:20 PM
Don't you end up paying out of your @$$ when you go for that route?
August 19th, 2005, 02:27 PM
Not always, try Toyota. If you go to Fred's Best Buy Used Cars (not a real dealership, just made it up), then yes, interest rates are huge. The reputable dealerships may be able to help you.
August 19th, 2005, 02:52 PM
Thanks for the suggestions guys. I think my only option will be to get a cosigner. My parents can't do it, but my sister might be able to, or my BF's parents.
I can't afford financing rates at a delearship, or lease payments. My payment for the car has to be $150 or less a month or I can't afford it, which already means a long loan which I will pay lots of interest on either way. CIBC had a great car loan program, which was 7 years, and about 2.5% interest, but I don't qualify.
The other reason I don't qualify is because I have no guranteed income. My job is a little "odd" because I only get paid for what I work. It's kinda like working as a cashier in a convenience store for 8 hours, but you only get paid for the 5 or 10 minutes here and there that you actually do transactions. I am in 8.5 hours, but I have no guranteed salary. Right then and there the bank said no, because to them I basically have no income as collateral.
August 19th, 2005, 03:05 PM
Dealerships sometimes have specials on their interest rates. We pay about 3 per cent interest through a dealership.
Perhaps, as annoying as this will sound, you need to get a job that doesn't sink you into more debt. It seems rather counter productive to work a job that will actually create more debt. Aren't jobs supposed to help you climb out of the debt hole?
August 19th, 2005, 03:06 PM
Dealerships have many different finance options. They have their own, banks, finance companies etc. You should also be able to find a small car for 150.00 or so. The loans are 4-6 yrs and depending on who accepts you, you may have very high interest rates. It doesn't mean that you may not re-finance a couple years down the road. Since your income is calculated in such a strange way, (commission?) you should also bring 3 yrs of proof of income with you and the last 3-4 pay stubs.
August 19th, 2005, 05:11 PM
When I was in banking, the debt servicing was 45% (or 40, don't remember), and I worked for two banks. I'll have to ask my wife about it. She's a manager at a major bank.
August 19th, 2005, 07:02 PM
Thanks for the tip about bringing pay stubs along. Didn't think of that. Only had the job since February, so I don't have that many to bring.
I love this job though, and it has potential to get me more income than other similar jobs, but I've only had it a short time and I'm still just new. on average I'm getting 40 hours a week, so it's not a pay issue, it's just an issue with the bank because I don't get paid if there is no work (which isn't a nice idea, and it's possible, but improbable that there will be no work for me to do).
August 19th, 2005, 10:49 PM
Be careful not to sign up for too bad of a deal. It sucks to be upside down in a car loan. Not that I would know what that's like! :rolleyes: