Car Loan Options For Students – Tips On Getting A Loan

Posted by: Derrick    Tags:  , , , , ,    |  No comment
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For students, having their own car can mean freedom and independence. It is like a right of passage into adulthood. They will have the ability to drive where they want to and when they want. Unfortunately, cars are not free. It can be difficult to find a car loan for a student. Most do not have much money or credit. This does not mean that there are no options for them, though. Finding that perfect car and loan is very doable with some time and effort. Below are some key things to keep in mind when searching for your next vehicle and car loan.

1. Car List – The first objective is to make a list of the types of cars that peak your interest. If you have no idea what you are looking for, take a look through local auto magazines or on the Internet. You will be able to search through every make and model that is available to find what you might want. Try to narrow your list down to actual cars you might want to purchase and make sure that they are in good working condition.

2. Price – It can be really easy to pick any car that looks appealing, but you have to pick cars that you can afford. Make sure to scratch off any cars on your list that you will not be able to afford. Use online loan calculators to try and figure out what the monthly payment might be on a loan for the cars that you are looking at to get an idea of what you’ll be paying.

3. Research – Research can involve anything from statistics on the cars that you are interested in to the kind of gas mileage the cars will get. Even if a car looks really nice, it won’t be that nice sitting in your driveway if you cannot afford to keep gas in it. Take the time to fully research loans because they will be with you for a long time. Don’t just jump on the first loan that you can be approved for.

4. Credit Score – Most students have never checked their credit scores and do not completely know what they are used for. Now is the time to learn. Keeping your credit score at an appealing level to lenders will not only give you a better chance at being approved for a loan, but you will also be able to score a better interest rate. This can lead to major savings over the length of the loan. If your credit score is low, a car loan is a great way to raise it. If you pay your loan payments on time every month, it will start to go up.

5. Other Expenses – Besides the loan itself, be sure that you can afford the other expenses that come along with owning your own car. Like mentioned earlier, gas is an expense that can add up depending on the type of vehicle and the amount of driving. Car insurance is another expense that needs to be taken into account when figuring out if you can afford everything. Also, it is inevitable that cars need maintenance and can break down.

6. Comparison Shop – Comparison shopping is one of the smartest things a consumer can do. When you find multiple lenders to possibly work with, get quotes from all of them to compare. This is the easiest way to get the best rates for the car you want to buy. Fully look at the terms and conditions of the loans before making any final decisions. If you don’t understand something fully, ask the lender questions. Never sign a loan until you are completely comfortable with your decision.

How To Get A Car Loan With Bad Or No Credit

When many students try to get their first loan, they will see how hard it can sometimes be. Before any lender will offer a car loan to anyone, they will check their credit score. Your credit score lets a lender evaluate the risk that they will take in giving you a loan. Many lenders will find it hard to say yes to someone that has either bad credit or no credit. As with most students just starting out, they have no credit yet.

One of the best ways to get a car loan for a student is to get your parents to cosign for you. If your parents have a good credit history, you will be able to get yourself a car loan with a great interest rate. Another benefit of your parents cosigning is that your car insurance will be lower. If you don’t like the thought of having your parents cosign, there are other options to look into.

Some lenders will offer students car loans even if they have little to no credit yet. This is especially true if you can prove that you are a good student with good grades. You might not get the best interest rate compared to if you got a cosigner with good credit, but at least you will be getting the loan on your own. Keep in mind that you will probably have to put a larger down payment on the car loan to get the loan approved.