There used to be a time when one could buy a car only after saving for years. If not that, one had to be rich to be able to afford one. Today, the scene is quite different due to easy availability of car loans. Anybody can buy a car - a person with very little savings or a person with a bad credit history. Even a student can buy an automobile by taking student car loans. Irregular public transport, education institutions situated far away from home, the trend of students working part time have all made owning a car almost a necessity for students.
Features of Student Car Loans
- Student car loans may carry a higher rate of interest than other loans. The down payment amount may also be higher.
- These loans are student loans where the car being purchased is the collateral.
- Most lenders of student car loans would want a part of the car price to be borne by the student.
- These car loans can be taken from banks, credit unions or through websites.
A student needs to consider the following before taking student car loans
- What would be the amount of the loan needed? For this, he would have to find out the amount of monthly payment he can make, the price of the car which he intends to buy as well as the amount which he can chip in for making the down payment.
- He should remember that the loan installment is not the only expense. He would need to take car insurance, he would have to spend on fuel and also pay money for car maintenance. So it would be best for him to first calculate his total monthly income and expenditure and see if he can fit all these into his monthly budget.
- It is always better for the student to buy a used car. If he wants a new car, it would be advisable to buy an inexpensive one. This way paying back the car loan will not be a burden for the student who may not be earning much.
- He should always look out for student car loans whose interest rates are the least and where payment period is long. This would keep his monthly payment down.
Online Student Car Loans
There are sites which offer online car loans to students. Some other sites tie up with lenders who offer student car loans. Using these sites, a student can get quotes from different lenders. He can then compare them and select the lender who offers the cheapest loans. These web sites generally provide online loan calculators. Using these, one could easily calculate the monthly installment to be paid for a particular loan. The student can also calculate the amount of the loan for a particular amount of monthly installment.
Ways to get student car loans at Low Interest Rates
- A student can borrow the loan from the same lender who lends to his parents. If their credit history is good, he may get loans at a confessional rate.
- Lenders prefer having cosigners to the loan. These could be either his parents or any other adult. This reduces the risk of the lender as the cosigners will also be responsible for the loan. He is therefore ready to offer the loan at a lower rate. In fact, some lenders insist on having cosigners for student car loans.
Student car loans help students to commute independently to college and to work. By making the loan payments on time, they can start building a good credit history which will be advantageous to them in the long run.