Debt to Income vs. Auto loan?

Question by Don: Debt to Income vs. Auto loan?
I have a few student loans on my credit file that make my debt to income ratio at 42%, but they are deferred until September 2007. I am trying to get an auto loan and the loan officer told me that I need to have proof of deferment to make my current debt to income ratio drop. The proof of deferment is no problem, but my concern is that the deferment is just until September. Would that be a long enough deferment to be approved for my loan? I begin classes at another university in May and I could get an extension for my current deferment, but I guess I wouldn’t be able to get the extension now already. I really need to get the auto loan now and cannot wait for an extended period of time.

Best answer:

Answer by ZCT
The problem is that your debt to income ratio is high. The next problem is that your deferment is only until September so a lender is going to worry about what happens in just nine months time. If you cannot defer again, you may have a problem paying your car loan. This may not be the case, but it doesn’t stop them from worrying about that.

All lenders are just looking to protect themselves and ensure that you can meet the obligations you have. They do not ever want to repo your car as this costs a lot of money, time and hassle.

You are just going to have to see if they will accept you. Get the proof of deferment and see if they will approve you.

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