When you’re a student, acquiring a car loan can be difficult. Nevertheless, it does not need to be an impossible task. On this post, let us consider some tips on how you can get a student car loan more easily.
Build good credit. Even students can establish early credit history and build good credit. How? One way is to apply for a student credit card. By using your student card regularly and paying off your balances on time, you will be able to build good credit. Car loan lenders will surely approve your appli
cation more easily if you have started building your personal credit while in college.
Maintain good grades. Students with outstand
ing grades in academics are often seen as responsible people. For this reason, a car loan lender is more likely to approve your car loan application if you can show an impressive school record.
Opt for a car you can afford. Buying your first car can be an exciting experience. It might be tempting to apply for a bigger loan and buy a more expensive car. However, this may not be the best time to buy the car of your dreams. Why not wait until you have graduated from college and acquired a stable job before attempting to purchase an expensive car.
Consider a second hand car. Do you know someone who is selling a used car? If yes, you can a significant amount of cash if you will purchase a second hand car rather than a new one. Just make sure that the car is still in good condition and that you will not be spending a lot on repairs and maintenance.
Compare student car loan deals. You can use the internet to compare different car loan deals for students from various lenders. Of course, you want to check out the interest rate, fees and the terms of repayment of each lender.
Do not try your luck by submitting applications at once. Once you have done your research, narrow down your choices to three car loan lenders. Then be prepared to investigate further by reading the terms and conditions. Once you are certain that you’ve found a good deal, that’s the time you can submit a car loan application. Keep in mind that each time a lender inquires your report, your credit score can drop by a few points. Thus, submitting multiple applications to different lending companies at once can badly hurt your score.
Watch out for car loan dealer scams. When you visit a dealership, you may be offered financing as well. True, some car dealers offer legitimate car loans as one way to increase sales. However, some dealers may try to take advantage of customers especially students who are buying a car for the first time.
For instance, a dealer may promise to give you a guaranteed car loan approval simply by signing up the application. However, a week after you sign up the contract from the dealership, you may be informed that you did not qualify for a low rate because of your credit score. Thus, you could end up being stuck with an expensive student car loan if you’re not careful.
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