Going to college is one of the most memorable times in life, offering a new sense of freedom, new friends and studies that lay the foundations for a future career.
Having your own car can help you enjoy that experience to the fullest, but what is the best way to pay for it? Even with the likelihood of little or no credit history behind you, car loans for students make sense when done right.
What you’re looking for
The aim is to qualify for an affordable loan amount and monthly payment while keeping interest costs down. You don’t want to pay too much for you money or overstretch your finances.
How to get it
Here are four effective ways to land a good car loan for a student.
Apply with a co-applicant or cosigner
You don’t have to go it alone. Linking up with a creditworthy co-applicant or cosigner will improve your chances of approval and, if approved, a lower interest rate. What’s the difference between the two? Applying with a co-applicant is to apply for a joint auto loan where both borrowers share responsibility for payment and rights to the vehicle. A cosigner, meanwhile, agrees to repay the loan if you cannot do so, but has no claim to the car. Their credit can also be affected if you default on the loan.
Bring a down payment
Saving up for a down payment will help to offset the low credit score that comes with a limited borrowing history and make a lender feel more positive about extending a loan. Even a small down payment can help, but the more you put down, the smaller the potential loan amount and the lower the perceived risk.
Choose an inexpensive car
An inexpensive vehicle could be a smart option when you consider the other financial commitments that come with a college course. Car quality is getting better all the time and there’re are plenty of attractive and reliable used models on the market. Budget what you can afford with auto finance calculators.
A low credit rating is something that can change, so you may want to improve your score before applying for a loan. Getting a store card or secured credit card and becoming an authorized borrower on someone else’s credit card are some of the credit-building steps recommended by the Consumer Financial Protection Bureau. If you need a car now, apply with a lender such as RoadLoans that accepts applications from students with no credit history.
Get on the road in a great vehicle
Whether it’s getting to class, the grocery store or taking a spring break road trip, your own car can make a world of difference at college. As an online lender, RoadLoans enables students to apply for a loan in minutes and get a decision in seconds. If approved, you’ll receive multiple offers tailored to your needs – just make your selection, print your documents and visit the dealership nearby. We work with a network of dealers able to show customers select vehicles meeting our standards for age, mileage and financing, so they can journey through college with no worries.
Apply for a car loan and get a quick decision.