Author Topic: Taking out a small loan...  (Read 2416 times)

Offline CoreyAwesome

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Taking out a small loan...
« on: June 13, 2013, 11:15:31 PM »
Going against the rules, I want to take out a small loan of $3000 or less. Can anyone give me advice in how to get a loan without screwing myself over. I have honestly only looked at a couple banks and credit unions, but it all looks like latin to me.

My purpose is to get a car for work purposes. My budget doesn't currently allow for me to get a $15,000 car loan and pay full coverage insurance. This will also be my first car. I live in Southern California and I bank with a big bank and not a credit union currently.

I want a loan because I want to get out of my current job ASAP so I can get a better job and dump all spare money to pay off the loan quickly.

I don't know what my credit score is like now. It was poor but not terrible, but I paid off a debt and only have my student loans which I've been paying.

Any help you could give would be much appreciated! And if you need more information let me know.

Edit:
-Corey

Blain

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Re: Taking out a small loan...
« Reply #1 on: June 14, 2013, 03:58:34 AM »
I think a loan agency would require full coverage insurance on any used car loan.
A signature load wouldn't require such coverage, since it's backed by your good name / credit rating. 

Offline Shrekfingers

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Re: Taking out a small loan...
« Reply #2 on: June 14, 2013, 04:31:01 AM »
Get your credit report online for free, one a year if you haven't already and sign up free at credit karma. They give you a credit score that is pretty close, they said mine was 780 but when I bought a car a couple months ago when they checked my credit score he said it was 820, although each agency has a different score.
Knowing your credit score and your credit report will help you keep from getting hosed by them, then shop around. GI Joe always said" knowing is half the battle" :)

Offline BriGy86

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Re: Taking out a small loan...
« Reply #3 on: June 14, 2013, 08:13:01 PM »
Oh I like these ones!

1. Download and check out a Loan Amortization sheet.
Instructions:
http://office.microsoft.com/en-us/excel-help/using-the-loan-amortization-and-loan-analysis-templates-HA001034640.aspx
Actual download page:
http://office.microsoft.com/en-us/templates/loan-analysis-worksheet-TC001141537.aspx?CTT=5&origin=HA001034640

Play with those numbers.  You can see how putting 50 extra bucks towards the loan will pay it off much sooner

2. If you're so inclined check out your credit report:
http://www.consumer.ftc.gov/articles/0155-free-credit-reports
"Q: How do I order my free report?
The three nationwide credit reporting companies have set up a central website, a toll-free telephone number, and a mailing address through which you can order your free annual report.
To order, visit annualcreditreport.com,"

Link to credit report page:
https://www.annualcreditreport.com/cra/index.jsp

I actually checked this out yesterday and got all mine.  It doesnt look like they tell you a score unless you give them 8 bucks per.... but you can see your entire payment history and whether certain bills are in good standing, over due, incorrect info etc.  These reports are free once a year.

3. get a budget. 
-How much reserve money will you have on hand to cover all expenses, Insurance deductibles if something goes wrong?  Do you know what they are right now? (I just found out I need to have 2k on hand if something catastrophic goes wrong with my house.  Good things to know.)
-What are you going to have left over?
-How much extra money will you shovel towards the principle of this loan?

As for the loan:
Do you already have an offer for this new Job that requires this car?  Don't jump ship from your current place unless you have something else already lined up and in writing.

Full coverage will be required if its a car specific loan.  A personal loan that's just cash shouldn't require collateral.

nelson96

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Re: Taking out a small loan...
« Reply #4 on: June 14, 2013, 08:45:26 PM »
@ Corey. . .  I'm assuming you're young.

I wouldn't think that a bank would be interested in giving a "car loan" on a car that's valued at $3,000 so full coverage insurance is a mute point (though recommended).  If your budget won't allow for a $15,000 secured loan then you're probably not a good risk for the bank to extend any kind of loan to without a cosigner.  That said, it sounds like you have a level head and good work ethic.  Hunker down and save your money and pay cash for the $3,000 car.  Ride a bike, take the bus, or carpool with a friend until you have the cash. 

To build credit, get a credit card that you can use and pay off each month.  Use this card on any and all purchases you would normally pay cash for, including reoccurring monthly bills (ie phone bill, electric bill, etc) and choose a card that offers points.  After you've built enough points to redeem them, use your points to treat yourself to a product or service for free.  The more you use this card and can show responsible repayment, the faster you will build credit.

Be careful. . . .  Good credit can get you in trouble, especially if you've earned yourself some good credit without having a good enough job to back it up.  Keep working hard and challenging yourself to earn that raise, promotion, or new job offer. 

Save, save, save.  Set a goal for yourself to get a healthy savings account and then set a new goal to pay those student loans off early.  Sacrifice now and enjoy the fruit later, you'll be glad you did.  It only gets tougher from here if you don't.

Offline theBINKYhunter

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Re: Taking out a small loan...
« Reply #5 on: June 14, 2013, 08:53:55 PM »
i'll agree with nelson, but add one suggestions. if you've never had a credit card before only put a few things on it each month until you get the hang of it. spending money that doesn't leave your bank account immediately can be an intoxicating drug. i would only put one thing on it, say groceries or gas. that way you slowly ease into it and do go crazy.

i know jack is anti credit card but my wife and i buy everything on one and pay it off each month. we like the benefits it gives and we are very good with our spending. we've been doing this for a a couple years now with great results.

Offline BriGy86

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Re: Taking out a small loan...
« Reply #6 on: June 14, 2013, 11:17:07 PM »
I agree with the last 2 posts.

As far as a credit card, I have one through my bank.  I can log in online and transfer funds form checking to the credit card.  Get used to checking that every other day or so, and you can pay the outstanding balance early several times a month.  That will prevent a huge shock at the end of the month and you can keep tabs on your spending.