Im so wanting to take out a loan. - Hot Rod Forum : Hotrodders Bulletin Board
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Old 08-16-2003, 06:18 PM
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Im so wanting to take out a loan.

i talked with mom and dad and they would cosign for me. It would be something like 1K or so, payments of like 45 bucks a month...which id prolly do like 100 a month to get credit...thats what dad said....with that 1K i could buy so much cool stuff for my car...SO TEMPTING...dont hate me if i do

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Old 08-17-2003, 08:48 AM
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Rubberman, I know you did not ask for advice, but thought I would put years of living and experience behind a few unsolicited words anyway. Be cautious of borrowing money!!! People lend money to make money and they are ready to make money off you!!!. Advice # !. NEVER borrow money for anything that is not appreciating in value!!! A home, land, or a business is something you would borrow money for. A car, TV, sound system, clothes, computer, camera etc are examples of things that are always depreciating. Separate WANTS from NEEDS . You want neat car parts, but you really don't need them. I financed a new 65 Chevy Super Sport in late 64 and when it was paid off in late 67, I looked at what I paid for that car (included finance charges) and vowed to never do that again!!!! Advice # 2. It is not how much money you make, but how much you save that will increase your financial success!! Go into a diligent saving concept right now. Put the money in a savings that you expect to pay into your loan and see how fast it will add up. You will have the $1000 saved in 10 months, then you can decide how and when to spend it. (you would have at least two months to continue paying for your $1000 loan if you made it now!!) I have not had any debt since paying for that Super Sport in 67 except for home mortgage, and every home I have owned appreciated. My savings accounts have allowed me to make some awfully good deals when others have become overextended on their credit!!! I think maybe reading between the lines, you think you need to establish your credit rating and that is ok, but do it on your terms ie, when you have your $1000 saved up, then let it sit and borrow the amount you want to spend. Continue your monthly $100 payment: $50 to your savings and $50 to your loan. When that transaction is completed, you have increased your savings to nearly $1900 and diligently paid off your loan.

Trees
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Old 08-17-2003, 08:56 AM
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Excellent advice from trees!!!

I would like to add, if you can't get a loan without a cosigner; then don't. Credit is something you will need during your lifetime. Use it wisely as trees suggested.
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Old 08-17-2003, 08:57 AM
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Hey Trees, I agree with what you have said, but we're only talking about 1K here. How else is a young person supposed to establish a credit rating if not with a loan or a credit card? That's the only way I know of. When it comes time to buy a house, then the credit rating is established and you stand a better chance of getting a good rate. Banks have discrestionary power over what interest rate you get, based on your credit history, income, collateral, etc.....believe it, I worked in a bank and saw it first hand. Maybe it's different in the USA, but that's the way things are here unless you use an online or "virtual bank" and they still need all that credit info to make a decision.
Keep in mind that Rubberman is only 18, so most banks here in Canada won't look twice at him without a co-signer.
Rubberman--make up your own mind, and if your parents approve then that's really all that matters, right?

Chickie.
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Old 08-17-2003, 09:46 AM
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just wanted to make one point: I think bad credit is the best thing that ever happened to me. It has forced me to pay for everything with cash. my house, car, pickup, two harleys and a corvette all paid for with cash and all owned by me. not bragging here, just pointing out that you can have it all AND own it all if you are willing to save for it. I got a great deal on my house because I had cash. my buddy just got a loan on a $78,000 house, but by the time he has it paid off, he will have paid $180,000 for it.
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Old 08-17-2003, 10:13 AM
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You want credit? Get a credit card from a large department store like K-mart or Sears, apply to a bunch of them and usually one will step up to take you as a customer.

Buy small things on it and pay it off immediately, in a year you will have all the credit card companies banging on your door to give you more credit. A loan if effective at creating the credit history you want but costs more in the long run. I learned this one from a roommate in college, he was a economics major and knew his stuff. It took two of these department store credit cards before he got a real card. Cost him nothing and he cut up the department store cards once he received his "real" card. I thought this was a smart way of creating credit and no one co-signed for him.

Just another way to skin the cat.
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Old 08-17-2003, 11:00 AM
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Thanks for all the great advice...im still going to have tp ponder it for a while.
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Old 08-17-2003, 01:02 PM
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Chickie, I offered a way of establishing credit on your own (Rubberman's) terms. Your (for better or worse half) offered another. Both require spending/saving discipline and that is what life is all about anyway. Bigwildgrin also has a good way, learned from the school of hard knocks. Our society of instant gratification is in deep and serious financial trouble. Instant gratification is just that, unsatisfying and short memoryied Long term gratification is very satisfying and long lasting. By the way (bragging time), I never had a credit card until I was 52 years old and that was because I could no longer make motel/hotel and rental car reservations and I had to travel a lot. I still continue to pay for these items instead of charging to my card (singular). I still have that card and it is used extensively to order car parts. I have yet to pay one penny of interest on the card!!! I bought my first home in 1970, utilizing my VA Loan, earning power , and having enough money in savings for the down payment and some left over. That was good enough credit rating!!



Trees
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Old 08-17-2003, 03:45 PM
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Just like BWG said, no credit is your best credit. People are too dependant on lenders, and not enough on themselves. (I fell under this category) The best way to get through life is to learn how to build your own capitol, your money has to work for you, you shouldn't have to work for your money. Personally Rubberman, I wouldn't get that loan to dump into a liability (ie, a car). If your going to get a loan (I don't advise it, but if you do) dump the money into something that will make you more money (into an asset) which would pay off the loan you're getting and that leaves you with extra money once you've wiped out the loan.




My .02

Marc
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