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Can't get approved for a loan.. suggestions?

So my tesla is ready for pick up, but I just got a call saying that I can't get approved and I would need a co signer. I am a year out of college working as a software developer making 80K living at my parents still so I have no expenses so a tesla is the perfect toy to buy, especially since I have so many ideas for apps to make!

Anyway my credit score is good, but the banks say my credit history isn't long enough. And I bought my current car for 20K cash a few years ago, which I now regret for my credit. Basically they said that the only way I could get this car is if I came up with enough cash to buy it, however that would not help my credit at all and that is one of the reasons I want to get this car. Would anyone have any suggestions what I can do? A co signer is out of the question since I make more than anyone else in my family...

Any advice would be nice! thanks!

Brian H penfed seems like a good credit union. I dont have affiliation so I would have to make donation. Since Im looking for basically around december of this year to start process do you think thats enough time in a credit union to qualify for loan. Should I open checking and savings? Never had a credit union account before so unsure how they work.

I had the same problem for my first car. The credit union would not give me a loan even with 50% down. The person you talk to at the bank/credit union will most likely not have the authority to make a decision to approve your loan. You will have to raise it up to their boss to get approved. Don't just accept a no from the first person you talk to.

I think it is pretty poor advice to say "your parents will always cover your ass" - I know that mine could not have done so when I was in my 20s. Live within your means is still the best advice to give to anybody.

cmarkoritz;
December 2013? I don't think any S is scheduled that far out in the US. Are you overseas? Is this an X? When is it due? Penfed will have more TM experience by then, but the X will be new to everyone.

Open a (required) small savings account and start asking questions of them.

Brian H Im in Arizona but im estimating I would have enough money for a decent downpayment until December of this year, so hoping they would still be taking orders around that time if not not sure when the cycle of orders begin again?

There is no cycle. Reservations can be placed anytime, including Sundays.

I can't seem to wrap my head around why any person would live with their parents and buy a $50,000+ car. The two just don't go together.

Why are you knocking him for living with his parents? Living with his parents results in lower expenses which increases his ability to make his car payments.

@tork it's just different personal values I guess. To each his / her own.

I'm no Suze Orman but a roughly 1:1 gross income to car ratio raises red flags with me regardless of personal situation. When you say your parents don't qualify to co-sign, did the banks tell you that or you didn't bother trying? In the latter case, if they are willing, you should give it a go. In the former, you need to think why:

- If they refuse because they feel its a bad idea, maybe you should heed their warning
- If they don't make enough money, are they willing to put theilr life savings / home up for collateral?
- ylyubarsky: he already said his parents don't make enough, how do you expect they bail him out?
- If the car costs as much or more than the roof over your head, it's time to seriously think about this

How are your savings? If you're in software, is your 401k & ESPP maxed out yet? Both are free money opportunities (emp. match, purchase discounts) that you'd do better leveraging than sinking your paycheck into a big car loan. After maxing them out, do you have enough monthly income to still pay for the Tesla?

Have you priced out the Total Cost of Ownership? It would suck if after financing the car you can't afford the insurance so you can't drive it! What about rewiring the garage? Service plan? Extra snow tires (if necessary)? Taxes (in CA, sales tax adds up to an extra $10,000)?

How are your personal savings? Are you raiding your emergency funds for your $40k down payment? If your parents' roof caves in, can you pitch in? Would you move out and abandon them? Major emergency renno. often costs as much as a Tesla.

Since you are living with your parents, are you pitching in? Do they have debts that you should be helping with? As long as you are under their roof, eating their food and fueling your car with their electricity (you most likely paid for your own gas before) you are a single family unit. Can your family finances absorb the hit? Are you pulling your weight?

Is your Tesla going to make money for you? You already have a car to get you to work. Otherwise, the Tesla is really is a luxury money sink. A net loss that has been factored into our lives. Would it make better sense investing your $40k down payment and having a net gain?

If after lots of soul searching and considering the above (including talking your parents into this) and you still want to go through with it then I wish you good luck and happy trails. Otherwise, consider it a $5000 life lesson.

BTW... as co-signers, your parents would co-own your car. They better be getting good dibs on it!

A $5000 lesson might be cheaper than paying the high interest rates offered to those that don't qualify for market rate loans.

Usually credit unions are more conservative when it comes to loan qualification because they want to have lower risk portfolios. A low loan failure rate serves their member's primary objective, having access to the lowest interest rates possible.

alexeb112 .... any updates to your story yet??

any?? lol

@tork: knocking him because he's an adult, making $80k, living at home while his parents pay all the bills, mortgage, groceries, etc. Instead of helping with those expenses, he's using that money to buy an expensive luxury car. So his parents are essentially paying for the car.

Yeah.. nothing wrong with that at all.

@alex: you haven't really earned the car until you have two feet to stand on in this world and are able to pay for it despite all the hassles and expenses life has to throw at you.

Just my 2 cents. Put that toward your loan. And good luck with it all!

Or just change it to a 40kWh car, and you will have plenty of time to save up money :)

+1 @jat

That's the least he should do. Get down to a 40, a red 40 if possible. Also 19" wheels if he ordered the 21", clean out other options he might have gotten. More time, less money.

Tesla should oblige, as the alternative is a lost sale.

@cmarkortiz

I got my loan through PenFed.

You probably don't need to start now, you can apply for the loan when you are invited to configure your car for production. If you are approved, you car loan is good for 90 days (3 months), which should be enough time for Tesla to build your car late this year, I hope :)

The process was pretty simple and the instructions on their site is good. Once you click on the car loan, they will ask you to become a member. 2 steps: 1. Donate $15 to $25 to one of the two listed non-profit veteran's support organization. 2. They will open a PenFed account for you with a $5 deposit. After, you can apply for your loan.

If approved, they will send you a blank loan check good for 90 days. When Tesla ask for final payment, you just fill out the check, and either present it to your delivery specialist or mail it to Tesla.

The bank wouldn't approve your loan for a reason. You need to prove you can live within your means and you haven't yet. I applaud your desire to want to own and drive this car, but for now, buy a Leaf, save your money, live a little and have something to look forward to.

In the meanwhile, maybe you can sell your reservation to someone and make a little money on it.

Not sure people here realize this: The OP clearly states that his car is ready for pick-up! If he cannot get financing I wonder what would happen to his car - I guess Tesla would try to find another reservation holder with the exact same configuration. What a mess.

Alex,

Talked to my loan officer at Alliant. His comments were pretty guarded, as they should be, but he said they are doing a lot of Tesla loans, and that with 50% down, and a good credit score, even with a short record, you should have a shot at it.

No promises, but give him a call:

Scott Paulson
spaulson@alliantcreditunion.com

773-462-2086

hf;
reservations are not salable property as such; TM explicitly refuses to recognize such transfers. You can approximate the effect by taking on a co-owner on the paperwork, and working out the details between you in a side-contract. Could work.

@Carefree - presumably that is the point of making the deposit non-refundable, to cover the cost of finding a new home for it and sitting on the car until they can. I imagine if they went down the list of people with similar configurations they would eventually find one willing to take a slight change to get the car earlier. That is helped by the fact that there simply aren't that many options to choose.

Flyrice.. thanks for advice on penfed just not sure they would give me time of day as my credit score is in the 500 range due to an "issue" i had being out of work for a while. I have 2 jobs now make great money and just hoping its the old "situation" of "cash" talks when it comes to trying to get financing.

cmarkortiz,

If your timeline is for December this year or later, there is a lot you can do to improve your credit score in the meantime. Work on it, you have nothing to lose, and a lot to gain.

GoTeslaChicago.. thanks for kind words, any advice on how to improve my score enough

Would have to know particulars, but here are some ideas.

Lenders don't want excuses, they want payments, not most of the time, but every single month. Don't rationalize that a few days late won't matter. It does, even once a year.

Do you have many credit lines open with balances?
#1 always pay on time, or early.
#2 prior to asking for a Tesla Loan get your balances as close to zero as possible.

Do you have any credit defaults that can be cleared up? If so do so. Many times a small blemish is just as damaging as a big one. Start with the small ones first.

In many cases, when applying for a car loan greater weight is given to how a previous car loan was handled than other kinds of loans. You could buy a used car, pay on time for 1 year to establish a good record, then pay off the loan in full before applying for a Tesla loan.

Older accounts are given more positive weight than newer ones. Don't apply for, or open new accounts unless it is absolutely necessary, as this will count against you. Conversely, don't close an older account, even if your not using it, because this will probably weaken your credit score.

There are many forums on the internet about this. Good luck

cmarkortiz,

Additional comment. If your credit is so bad that you have been cut off from credit, it is harder to re-establish a good payment history, and although time heals, it is a very slow process.

If that is your case, you will have to start over with a secured credit card, and a store card or two, such as Sears, Home Depot etc. The used car idea will work too. You will have to use credit to get credit. Therefore it is better to carry a balance and make timely payments every single month, even if the amount of credit you are given is small.

This is optional, but I recommend you subscribe to a credit reporting agency so you can monitor your progress every month or so. I'm sure you will get the positive reinforcement you need to continue if you can see small but steady improvements in your credit score.

I have 2 credit cards not with a huge limit about 3500 in credit which are both almost payed off. I almost went into foreclosure on my house since i wasnt working for about 3 months so missed several mortgage payments which demolished my credit score. thats the issue now, all is great now but thats where the score dropped.

really want to know what ever happened to alexeb112 and his loan problems. Anyone know if he ever got approved or what he did he doesnt comment on this thread anymore. For my story Im on my way paid off one 500 limit credit card to strat the credit reapair process, i know its small amount but want to do everything possible to get credit back in check so when im ready at end of year i dont have same problems.

Alex,

Please let us know if you got your car (and loan). I'm sure others can benefit by knowing how it turned out.


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