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How much of a car loan can I afford/apply for?>

I work 2 part time jobs, very part time.  I bring in 1000-1100 a month.  I know not much.  I just transitioned from SAHM to WM, am unmarried so I cannot count my SO's income toward my income.  Anyway.  I heard somewhere that it is 20% of your monthly income, which is how much your payment should be.  But again I don't know.

My credit is really good for what I have.  Only 2 credit cards, both have balancs, which I pay off every other month, never been late, have small bills in my name that get paid on time always.  So


-How much of a loan can I afford?

-Is the 20% of monthly income what I should pay toward a car realistic?

-If anyone has worked for a bank or loan center etc what are my chances?


THis is the first car I have ever bought.  I am 19, so I am not looking for anything ridiculously expensive for only having a 1000-1100 monthly income.  I saw some cute cars between 9k and 15k....but I don't want to try for too high of a loan and get denied.

also any insight on how the car purchasing process works would be great.  I am going to on monday the 21st and I already want to have a price range in mind.


THank you


Asked by Anonymous at 9:38 PM on Feb. 13, 2011 in Money & Work

This question is closed.
Answers (8)
  • You will be able to get a loan, they give them to anyone these days it , the interest rates just may be higher if you haven't established much credit yet. Just keep in mind you will have to have full coverage insurance as well if you get a lien on the car. If I were you I'd try to keep your payment under $250 so that you can make sure you have $ for insurance, upkeep and emergency repairs. It's hard to say what amount of money that would be w/o knowing what your interest rate would be. I would try to stay more towards the $12, 000 and under range. Go w/ something that has a long warranty so that you won't have to pay for stuff that needs to be fixed. Also, even if you can afford more than your payment every month, you can always pay extra and get ahead. GL

    Answer by genagina at 9:56 PM on Feb. 13, 2011

  • Depends on your bills, but I gotta say, 9-15k sounds way too much if your bringing in 12k a year. That's more than your annual income. I've always heard to not have more than half your annual income tied up in cars. I make around 45k a year and that is the price range I try to stay in...around 15, maybe 20k. if I were in your shoes, I really would keep it around 5k or lower if possible. there are good older cars in that range you just have to find them. I got a 93 camry for 2800 and its a great car.9-12k just sounds too risky to me regardless if you can get approved. I'm not trying to be a smart ass or anything so don't take it wrong, I've just made every financial mistake possible especially when it comes to cars and I hate to see people do what I have done.

    Answer by Astraea_79 at 9:59 PM on Feb. 13, 2011

  • It depends on how much your bills are? what do you have left every month after you pay everything you have to?

    Answer by genagina at 9:46 PM on Feb. 13, 2011

  • My bills, in my name, total to 95bucks so I guess after that I have about 900-1000

    Comment by Anonymous (original poster) at 9:49 PM on Feb. 13, 2011

  • I'd talk to your bank and look into used, not new cars.

    Answer by sojourner. at 9:50 PM on Feb. 13, 2011

  • yeah I am looking for used cars only. I found a 14000 once, monthly payments @290 that had only 34kmiles 2010model
    and then I found another one that was 12000, monthly payments @235 and 75kmils 2007model

    the monthly payments were estimates. I figured I could afford them. I guess I will call my bank tomorrow to know for sure.

    Comment by Anonymous (original poster) at 9:55 PM on Feb. 13, 2011

  • I agree with Astraea. Closer to 5K is probably a good idea. is a good place for car buying tips.

    Answer by Christina807 at 10:49 PM on Feb. 13, 2011

  • I know for my income it sounds kind of high, but it's not like it is income that I need to have, I could go back to being a SAHM. The purpose for me working was to buy another car so I could commute for school and not have one car between my SO and I. my SO makes 40-50k a year. My extra 12k is mine to do with what I want. so paying 250 would be good. Insurnace around I'd be paying about 400 a month and still have abour 5-6 hundred left over, that I could continue saving or put tward the car and pay it off asap

    Comment by Anonymous (original poster) at 11:15 PM on Feb. 13, 2011