Interest Rate Factors

To some degree, other factors may cause a higher rate to be acquired when applying for a loan.  Even though a rate may be available, a loan must be approved based on your level of income, which is known as payment-to-income (PTI) as well as your total debt known as debt-to-income (DTI).  Listed below are those additional factors that could impact the ability to aquire a loan and/or effective rate:

 

Contributing Interest Rate Factors:

1.  Less than 5 trade lines on your credit bureau.
2.  Less than 3 years of activity on your credit bureau.
3.  No prior auto history (i.e. first time buyer).
4.  Auto dealers use a credit bureau that is Auto Specific.
5.  Financial limits may be imposed based on previous high auto credit.
6.  Derogatory information on your credit bureau (i.e. bankruptcy, judgement, tax liens).
7.  Some Auto Dealers and Lenders only use one credit bureau specific to your location.  Your credit score may have a large variance between the different credit bureaus.
8.  Lenders may be using a different version of a credit bureau than the auto dealer.
9.  Not all auto dealers have access to lenders with the best rates.
10.  Lenders have a minimum finance amount on auto loans without adjusting their rate (usually $7500).
11.  Excessively high mileage on a pre-owned vehicle.
12.  Your time in the area and your time on the job.
13.  Areas with a limited number of auto dealers may not be willing to be as competitive as in larger markets.
14.  The trade value expected may not be the value you receive for down payment.

These contributing factors may have an adverse affect on a qualifying rate and actual approval.


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