Personal Credit Crunch Woes

I am "on hold" right now waiting for a "credit decision," so I can buy a used Subaru to brave the bitter winters up here. I find this whole credit process so damn demoralizing these days. I am asking for a relatively small loan, but because I pay my student loan each month ($580 a month!) and I make less salary, they are questioning my ability to make payments.

The loan servicer came back and asked if I would like to include my husband's salary OR would I like to just put the whole loan on my very high credit card balances that I have at the bank? WTF? Do you understand this logic? I surely don't. Why would the bank prefer that I put the car on a credit card rather than underwrite the loan? I am sure they are going to approve it. But, I am surely not alone in bemusement and confusion over the recent freezing of credit and the decision making process of banks.

Does anyone out there understand?

Oh, and I forgot to add, that one option for me to ensure the loan was to defer payment on my student loans. Huh? If I stop paying my student loans and let it rack up interest (a fixed interest rate since you cannot renegotiate that shit), I can get a car loan.

Oh, and another thing. The only reason I am going through this is because I was approved at an amount and then asked to increase it by $500 so that I could roll the transfer of title and tax fees into the loan.

I am just trying to be a good consumer. Apparently, I would be a great consumer if I screwed the government their money for the loan they gave me for my PhD and just gave that money to the bank.