3800 Ebay question

00GTPSC

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Dec 20, 2008
762
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I was thinking about trying to pick up an older jeep on ebay. Say the guy wants 5400 for it. Now is there anyway to get a loan for that? Cause i know my bank would just kelly blue book it and say it's only worth like 1500. Can i finace through ebay or something, or would a bank give me that much of a persoanl loan if i really don't have that much in the bank? Now i make about 1500-1800 a month but i pay 500$ for my car, 200$ for insurance, cell phone bill and gas and cigarettes and crap. So i can definitley pay this thing off in a year. Any suggestions?

Jim
 

bracketracer

Member
Jun 20, 2008
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Let me try to help, since I manage a bank branch, and am a loan officer. Some of these things will vary between each institution, but it should get you a start. If you are using the vehicle as collateral, then most places aren't going to loan you more than the "Loan Value" of the vehicle. This number takes into consideration the depreciation of a used vehicle, and can be shockingly low on vehicles that are more than 3 or 4 years old. You will almost always need a decent sized down payment to make that work. If the vehicle is out of state, it will be complicated too. If my bank were to do a loan like this, we require a copy of the title, along with a "Statement of Vehicle Sale" (sort of like a private party purchase contract) that is signed by buyer and seller. An Ebay seller may not be willing to get you a copy of the title unless you are high bidder, and then you would have to get them to sign the extra documentation. MIKES3 was right that your credit rating will have alot to do with whether you are approved or denied. If the score is at least 650 and you have no late payments, forclosures, bankruptcies, etc., you might have a chance. Another very important area is your "Debt Ratio." To figure that out, start with you "Gross Monthly Income" (your pay before taxes are taken out). A simple formula for hourly employees is as follows:

Hourly Wage x Guaranteed Weekly Hours x 52 weeks divided by 12

Example $10 per hour x 40 hours per week x 52 weeks divided by 12 = $1,733.33

Next you add up your major monthly debts, Rent/Mortgage Payment, personal loans, credit card payments, etc. along with the proposed new loan (insurance, gas, food, clothes etc aren't included on this because they are a "given" and already taken into consideration for the ratio).

Example $500 rent, $200 loan payment, $50 credit card, and $250 for the new loan, for a total of $1000.00

You divide the $1,000 in payments by the $1,733.33 in income, and get a debt ratio of 57.69% (and almost certainly a denied loan application). The debt ration should end up below 40% to give you a fighting chance.

Getting an unsecured personal loan is tough, especially for that much. They are extremely risky for the bank, which means that they are much harder to get, and you will pay more for them. The used vehicle loan is the better option, if your bank is willing to do it.

From the info you provided, I am going to assume that this loan would be tough (but not impossible) to get through most banks and credit unions. Here would be my advice. Save as much as you can for the next couple of months, and put it in your savings account. If you can prove to the bank that you are coming in with at least half of the purchase price already saved, then it could help your chances considerably.

Hope the info helps!
 

RareGMFan

Addict
Jan 12, 2008
934
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Naperville, IL
Originally posted by bracketracer@Apr 2 2005, 08:35 AM
Example  $500 rent, $200 loan payment, $50 credit card, and $250 for the new loan, for a total of $1000.00

You divide the $1,000 in payments by the $1,733.33 in income, and get a debt ratio of 57.69% (and almost certainly a denied loan application).  The debt ration should end up below 40% to give you a fighting chance.

What is the credit card amount you're taking into consideration based off of? Minimum due? And how would the bank determine/have access to such info as minimum due?
 
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