Car loans for students make sense when done right

Car loans for students and college students

 

College comes with its commitments, not least of them financial, and plenty of students wonder how buying a car fits into it all. Even with a part-time job, saving up for a vehicle may not be a realistic option, especially if you want something reliable. That’s why car loans for students are the answer for many college-goers, even if they have no credit history to speak of.

Finding suitable lenders and applying for credit is not hard – online companies such as RoadLoans streamline the process with a quick, one-page application and instant decisions. And if approved, not only can you buy the wheels to make college life so much easier, you’ll be able to spread the cost of your purchase over time, too.

Whether you have some time to build your credit score or want to apply for financing now, the following steps outline how to get a car loan as a college student.

 

How to approach auto loans for students

 

1. Build credit if you can

Credit history is typically a major factor in a lender’s decision on your application. There are no hard and fast rules to raising your credit score, but these guidelines may help:

  • Pay your bills on time, every time
  • Don’t get close to your credit limit
  • A long credit history will help your score
  • Only apply for credit that you need

If you’re starting a credit history from scratch, consider:

  • Taking out a secured credit card or store card
  • Cosigning with a family member on a card
  • Becoming an authorized user on their credit card account

 

2. Budget and don’t take on too much car or too large a loan

Use online auto finance calculators to estimate what you may be able to afford for a monthly car payment and total loan amount, so you can stay within budget. It’s easy to adjust the parameters like down payment and loan duration to see how the numbers change. When choosing your vehicle, check out lists of top cars for students put together by experts at the likes of Edmunds and Kelley Blue Book. Often, these include safe, good-value used cars.

 

How Much Car Can I Afford?

Great question. Fill in the boxes below to help with the answer and determine what price you can afford to pay for a car.

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By the Numbers

Need a little help with your desired monthly payment? Fill in the boxes below to see just how much you are spending.

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Estimate your monthly new or used car loan payment

This tool can help you figure out how much you might spend each month for your car.

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A Little Extra

Fill in the boxes below to see how putting additional money toward your monthly payment may affect your payoff amount.

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The Refinance Option

Fill in the boxes below to discover if you can save money by refinancing your current vehicle.

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To see the potential savings in fuel cost from your current vehicle to a new one, fill in the blanks below.

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*APR is the Annual Percentage Rate or the cost of your credit at a yearly rate.

3. Get a co-applicant or cosigner with a good credit rating

Adding a creditworthy co-applicant or cosigner can be a good way to strengthen your position when applying for car loans for students. Co-applicants are joint borrowers with equal responsibilities for repaying the loan and have equal rights to the vehicle. A cosigner, on the other hand, guarantees to make any missed payments or cover the full loan amount in needed, but has no rights to the vehicle. Both options spread potential risk for an auto lender extending a loan, and can lighten the load for borrowers.

 

4. Make a down payment 

It could be cash down, a trade-in or both. Whichever way it’s achieved, the more that’s put down, the less you need to borrow. It may also drop your monthly payment and slim down what you pay in interest charges.

 

5. Apply with the right lenders

Consider auto finance companies such as RoadLoans that accept applications from people with all types of credit, including students and first-time buyers with no credit and bad credit histories. Thanks to our fast, online platform, qualified applicants can get preapproved and shop for a vehicle already knowing the loan amount, monthly payment and interest rate for which they are approved. That means they can focus on negotiating the best price for their car when it’s time to buy.

 

6. Negotiate the terms

It may be possible to negotiate the terms of a loan offer, like the interest rate and annual percentage rate, and save a decent amount of money over the life of the financing. Other negotiable terms might include the length of the loan, whether there are prepayment penalties (there are no prepayment penalties with RoadLoans), and any additional fees.

 

7. Keep payments up to date

Paying auto loan bills on time, every time, may help build a good credit score for the future.

 

An easy car-buying experience

 

Securing financing and buying a car for college is a great feeling, and an easy process makes it even better. RoadLoans enables you to apply online when it suits you, from your desktop, tablet or mobile phone, in just a few minutes. If approved, you can shop and drive the same day. Just select your loan offer, download the loan packet and visit the preferred dealer listed inside. We work with thousands of trusted dealerships so you can shop for select, high quality vehicles with confidence, and start enjoying the convenience of your own car through college.

Apply for a car loan and get an instant decision.

 
 

* “Bad” or “Poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press), Bankrate.com, Credit.com, Investopedia, NerdWallet.com and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by RoadLoans.com and Santander Consumer USA.

 

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