what's the highest interest...

[skyan]

Our Chapter 7 was discharged January 9th, 2006. We really need to buy a car now. We are concerned about the interest rate that we will probably get. What is the highest interest rate a loan company can charge? We bought a car about 10 years ago and got a 13% Back then it was because we had too little credit. Now there's plenty to look at, but its all bad now. What kind of rate could we be looking at now?

Thanks.

[brokentex]

Our Chapter 7 was discharged January 9th, 2006. We really need to buy a car now. We are concerned about the interest rate that we will probably get. What is the highest interest rate a loan company can charge? We bought a car about 10 years ago and got a 13% Back then it was because we had too little credit. Now there's plenty to look at, but its all bad now. What kind of rate could we be looking at now?

Thanks.

I have seen as high as 28% offered by Ford on a used car.

[edwards2]

skyan - Ford Motor Credit is BK-friendly. We bought our 16 year old son a 2000 Chevrolet Silverado. Our interest rate is 15% - not great but our BK was discharged in August so we were prepared it would be high. FYI we tried to buy a truck for him several months post BK and were turned down. SO we are making progress. I have never heard of anyone being charged 28%; in certain states there is a cap.

[pink_amulet]

All of our cars over the years have been at 21% 20% 19%, We are waiting now until our credit gets better. We has those rates when our credit score was in the 550's and those rates were from Primus Automotive, Lobel Financial, and Nuvell Financial.

Good luck and show around!!

Pink

[brokentex]

skyan - Ford Motor Credit is BK-friendly. We bought our 16 year old son a 2000 Chevrolet Silverado. Our interest rate is 15% - not great but our BK was discharged in August so we were prepared it would be high. FYI we tried to buy a truck for him several months post BK and were turned down. SO we are making progress. I have never heard of anyone being charged 28%; in certain states there is a cap.

28% was what was offered by ford credit to my wife back in July of 2000 when she was 20 years old and trying to finance her first car. The funny thing is they still wanted a cosigner and $3500 down on a $10,000 loan and my wife's FICO score was 705 at the time. We ended up writing a credit card check for $9500 that was locked at 9.9% instead of using normal financing.

[13inOR]

Even if you end up with mid to high 20's percentage wise, after a few months of regular payments you could refinance to a much lower rate.

[down @ out]

Wow those rates seem pretty rough for folks who have just went through what we have gone through.

Never could quite figure all of this out anyway. Seems to me if a person has just discharged a sizable hunk of debt, has a good income, and can`t file bankruptcy in a long time they would be a good credit risk. Believe the credit industry is doing what they are doing just to stick it to us.

I know I bought a new honda about 7 months before I filed and the interest rate is 2.9 percent. Who knows what it would be today, yet I am in better shape now than then to make the payments. Go figure.

[edwards2]

brokentex....that is unreal and especially with such a high FICO score. I know some lenders have said that having no credit is almost as bad as bad credit which of course is ridiculous. How do you ever get credit if a lender wont give you a chance? I know for us Ford Motor Credit was a godsend and by the way they have already lowered the interest rate and we have only made two payments.

On getting credit post-BK I can see the logic in the fact we cannot file Bk for 10 years or however long it is and we have discharged all of our debts for the most part but the most important thing they look at is the fact we filed at all. No matter what reason(s) we all had for filing BK the stigma is still there - at least for awhile.

[StaciMM]

13inOr-

Refinancing on a vehicle is not always so simple. Since vehicle values drop so quickly, and a few months of payments at a high APR will make little difference in the principal balance owed, it may turn into 'can't refi because I owe more than its worth'.

[13inOR]

Well that is true, Staci. That is something to consider for sure. : )
Fortunately, the couple of times we have need to refi an auto loan its been
possible so I momentarily forgot about the ugly "upside down" possibility.
MY BAD!!

[Rona123]

To Edwards2 and others who have mentioned on this thread (and others) that after a few payments, some finance companies will lower your interest rate: Was there any agreement to do so in your contract or any firm criteria to which they can be held, or do they do so if/when they feel like it?

If I end up with a high interest rate on a car loan post-BK, with some sort of promise that my interest rate will be lowered with on-time payments, I'd like to make sure I can hold them to their promise!

Thanks!
Ron

[skyan]

Thanks everyone!