Is this too good to be true ??

[fsugirl]

I just submitted our information via lending tree for an auto and was just approved with Capital 1 Blank Check for an interest rate of 12.95 ? Is that good. I am thinking it is just being 5 months out of BK ?? Has anyone had experience with Capital 1 Blank Check before ?

[FilingOnMyOwn]

Blank check is a great option. 13% is not a great rate for an auto loan, but if thats the best you can find then go with it.

[fsugirl]

FILING-Well I know 13% is not great but I think it's reasonable from just being d/c from BK right ?

[FilingOnMyOwn]

I can tell you that I have paid 16% with my old credit union before I had bad credit or filed bk. And its not easy to pay down. Even with a short term loan, a high interest rate like this will make it almost like a mortgage, the first year or so will go almost all to interest and pay very little principle. But if you have to buy, its somewhere to start. You can always pay down faster or refinance in a year. But the beauty of the blank check is that you can shop around and buy anywhere. I would search autotrader for private sellers who are extremely motivated. If you can find someone who has a great car and desperate to sell, you can get a great deal. I would look for a car you can try to get under blue book trade in value. Call around and ask sellers what their 'bottom line' is on the price. Use kbb.com to appraise anything you are considering buying. If you can get a used car under trade in value, you can almost guarantee you will not end up 'upside down' in the loan. I've done it this way several times, and when something comes up, I was able to sell and cover the loan every time. So even with your 13% interest, if you're careful to get a good deal, you're way ahead of even a 0% loan on a new car where you are upside down the minute you drive off the lot.

[fsugirl]

FILING-Great advice !! Thanks so much !!