Before signing up that student car loan application, here are ten points you should seriously ponder:
1. Buy a used car. The thought of driving a shiny, new car can be wonderful but as a college student, you have other more important priorities other than paying off your car loan. Buying a used car can save you a lot of money as long as you can choose one that is still in good condition. Furthermore, make sure that the car has not been stolen.
2. Decide the type of car you want to buy. Before visiting a dealer’s location to personally examine cars, you should already have a clear idea of what you want. If this will be your first time to buy a car, ask help from someone who knows about cars. You can ask your parent to accompany you and help you test drive cars. If you don’t know anyone who knows about cars, you can also ask help from a professional mechanic.
3. Get pre-approved first. Get your student car loan pre-approved first before you go out and shop around for cars. This way, you’ll know exactly how much your budget is and you don’t need to waste time looking at vehicles that you can’t afford.
4. Ask for a student discount. There are car manufacturers that offer special discount rates for students and it’s something you should take advantage of. For instance, you might be eligible to get a student car loan with zero down payment or you might be able to enjoy a few months of payment at zero interest.
5. Compare student car loans. You can gather car loan quotes through the internet by visiting car lending companies’ websites or car loan dealers’ sites. However, do not submit applications to different lenders at once as this can badly hurt your chances of approval. If a potential lender sees a lot of inquiries in your report, a lender may think-twice about granting you approval.
6. Get a co-signer. If your parent has an impressive credit history and credit score, you may ask them to co-sign your car loan. A car loan lender would be more willing to reduce your interest rate and monthly payment if you have a co-signer.
7. Aim for good grades. Do you have impressive grades in the academics? If you are a top student in your university, you have a better chance of enjoying a lower car loan rate or better car loan package. Why, you may ask? Students who are good with their studies are usually regarded as more responsible and credit-worthy than students with failing grades. So if you’re smart, use it to your advantage when acquiring a student car loan.
8. Think about the monthly cost. Will you be able to keep up with the loan payments each month or will it be difficult? How do you plan to pay off your car loan? These are important questions that you should consider before deciding which car to buy or how much financing to apply for.
9. Build good credit. Do you have good credit? You can build an early credit history by applying for a student credit card and maintain an excellent score by paying your credit card charges on time. Keep in mind that car loan lenders prefer customers who can show proof of their credit-worthiness.
10. Read the fine print. See to it that you will not be subjected to hidden charges or unreasonable repayment terms by evaluating the car loan Agreement before submitting your application.
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