I have $20,000 in debt and have a few credit cards that are maxed out. Can I get an new auto loan?

Question

I have $20,000 in debt and have a few credit cards that are maxed out. Can I get an new auto loan?

Answer 1

It might really save you some money to just get an auto loan quote online to see what the going rates are.  You might be pleasantly suprised.  Also if your credit is not so great, a lot of online loaners are more willing to help people.



What I most often tell folks is that an internet quote at http://auto.lowratetoday.com is the way to go.

Answer 2

Do you already have a vehicle?  If so, then you're an idiot.  Get your priorities straight.  Pay off your debt as soon as you can, and quit adding to it.

And people wonder why the world is the way it is...

Answer 3

Can you?  That depends on a number of factors.  You'll probably get a really bad interest rate unless you get lucky with a credit union that offers a fixed rate.

Should you?  Not unless you absolutely need to.

You should really focus on paying down your debt.  The sooner you do, the better you'll feel.  You need to sit down and think real hard.  If I were you, I'd start taking public transportation and paying down your debt before taking on more loans.

Seriously, dude, if your credit cards are maxed out, you need to get your act together first.  Seriously.  You want creditors garnishing your wage from work???  I don't think so.

Answer 4

can you get a new auto loan? absolutely. Should you? Heck no. Your interest rate will be an astounding 12-15 % or more, meaning you'll be paying more for a Chrysler than someone with good credit would pay for an Audi or BMW. When your credit cards are maxed out, you are considered a much higher risk for lenders, which accounts for the high interest rate, low money down type loans.  Ideally, what you want to consider is not just the new/ new-used car, but the insurance, and the loan origination fees that come with going to the dealership. They still have to get paid too, and you may end up paying around 5000 more for the car than what the sign says when you leave the dealership, not to mention what you will pay in the note, will come up to you paying double or more for that car.

It sounds like you are doing what 90% of Americans do, mismanage money and not being realistic with our spending habits. Get the video of Suzan Orrman from the library, Generation Debt, or read a book by Robert Kiyosaki. One thing to consider is if your cards are maxed out, and you don't have the immediate money to buy a nice dependable car(I'm presuming this is the reason you want to get a car NOTE) then save up for a decent car, then sell it once you get a little more money to go towards buying a better car. With cars, you can always upgrade but it's difficult to downsize, especially with notes.  You WILL topple under with a car note, insurance, gas, and 20,000 in credit card debt, its merely a matter of when.

Finally, if you simply decide you absolutely must must have a car, buy a good used car. Check with your credit union and see how much they will finance you for, then check craigslist for a good car, or ebay or your local newspaper. You save a lot and your car not will be cheaper. My husbands car note is $150 bucks+$100 a month for a 2000 benz, while I paid $420+ $240 insurance for a 2006 convertible chrysler. Guess who bought theirs from the dealership? His friend had an AUDI and his note was not even $300 a month. He had paid off all his debt and got like a 6-7% interest rate. Remember the motto work smart not hard.

Also usually if you owe less than half on a credit card it boost your credit, if you owe less than 33% your absolutely smoking, so look at your options for consolidating those credit cards and paying them down while also building yourself a contingency fund for hard times.  good luck.

Answer 5

I highly suggest that you looking into a credit counseling service. If you have that much debt and you are still trying to buy things, you've got a serious impulse control problem.