 A loan again, naturally
|
 Dear
Terry,
I lost my dad last year and went out of the country for four months. When I came back, I got a repo letter from my credit union. I later called to work it out but they would not agree. My car was picked up in February. I want to buy a used car for under $3,000. I have a good, steady job and I've been working for this company for more than five years. Do you think I can get a loan for car?
-- Toyin
 Dear
Toyin,
With such a fresh repossession on your record, no company
that lends money at competitive rates is likely to extend you credit. There are
plenty of buy-here, pay-here types of used car lots that will set you up, but
there are two drawbacks: You'll pay an exorbitant interest rate and the prices
of their cars will usually be highly inflated.
What's more,
many of these dealers don't report to a credit bureau so your timely payments
won't even help you repair your credit rating.
To make the best of a bad situation, try to save
enough money to make a sizable down payment -- which protects the
lender if you default and may help lower the interest rates -- and
find the cheapest, but most reliable, car you can.
You fail
to mention whether you have any other sort of credit available, such as a bank
credit card. If you do and there's room on your credit limit, you might go for
a cash advance. The interest rate will probably be high -- 21 percent or more
-- but you'll be in better shape than being at the mercy of a predatory used-car
dealer.
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If you have a question for Terry, e-mail him at Driving
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