Prime, Alternative A, Subprime and Hard Money (Jilted Loans)
If your score is 680 or above, you are considered to be Prime and can get the lowest interest rate. This means that you should not have a problem getting the best interest rate on a loan. Another major factor could be debt to income, which means the amount of debt you have in comparison to the amount of income you make. Do you have the income to pay back the loan?
If your score is 620-679, you are considered Alt A. This will give you a interest rate a little higher than Prime.
If your score is 500-619, you are considered Subprime. This will give you an even higher interest rate.
If your score is 500 or below, you will probably get a Hard Money or Jilted Loan. You may still be able to get a loan, but you will have to pay fees and a much higher interest rate. THIS IS NO PLACE TO BE. A low score can keep you from getting insurance or even a job.
(This information is based on mortgage information in March 2008.)
If your score is 680 or above, you are considered to be Prime and can get the lowest interest rate. This means that you should not have a problem getting the best interest rate on a loan. Another major factor could be debt to income, which means the amount of debt you have in comparison to the amount of income you make. Do you have the income to pay back the loan?
If your score is 620-679, you are considered Alt A. This will give you a interest rate a little higher than Prime.
If your score is 500-619, you are considered Subprime. This will give you an even higher interest rate.
If your score is 500 or below, you will probably get a Hard Money or Jilted Loan. You may still be able to get a loan, but you will have to pay fees and a much higher interest rate. THIS IS NO PLACE TO BE. A low score can keep you from getting insurance or even a job.
(This information is based on mortgage information in March 2008.)
Auto Loans
Your payments on an automobile will go through the roof with bad credit. Here are examples.
$20,000 auto loan over 5 years
Category_________Interest Rate_____Payment____Total Cost After 5 Years
Prime______________7%___________ $405____________$24,300
Subprime___________14%___________$477____________$28,620
Hardy Money (Jilted) ___21%__________$557 ____________$33,420
Home Loans
$100,000 mortgage over 30 years
Category_________ Interest Rate_____ Payment_____ Total Cost After 30 Years
Prime______________ 6.50%________ $632 ____________$228,625
Alternative A _________7.50% ________$699 ____________$251,715
Subprime ____________10% _________$877 ____________$315,925
Hard Money (Jilted) _____14% ________$1,184 ___________$426,553
Having a low score can cost you thousands of dollars.
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