Financing A Car In College For Students: Financing a car in college can be a daunting task for students whose primary focus is on schoolwork rather than earning a living wage in the workforce.
Additionally, as student loans begin to accrue with each semester and are abutted by common bills such as cell phone service, credit cards, and other miscellaneous items, procuring an affordable automobile can be especially difficult. However, if one is creative enough, there are several ways to ease the process so that, as young adults, university students can secure reliable and affordable transportation.
Financing A Car In College For Students:
- Factors to consider!
The make and model should be entirely up to the individual, and there are many factors to consider before making a purchase. If one elects to go for a sports utility vehicle (SUV), one should be aware that it will cost more money in gas. Conversely, a sleeker, sporty ride will doubtless cause insurance rates and premiums to increase.
However, it is important for students to understand that they do not have to settle for a junk yard salvage vehicle. There are many types of loans available.
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When the vehicle is ready to be selected, the next decision is to securing funding either through a banking institution or some other type of lending organization.
Many lending options are now becoming available online, which enables the borrower to quickly compare and contrast various different policies, terms, and interest rates.
- For collegiate drivers specifically, there are myriad deals which can save money.
Firstly, the lender should inquire about any possible rebate offers from the car seller. In many instances, the car dealer, or even the manufacturer, will provide a litany of incentives in order to drive sales for a particular period of time. These can include rebates for the driver after a certain amount of time has passed or a certain number of miles have been driven in the car.
Another possibility is that of cash back bonuses. Frequently, on dealership commercials on radio or television, they will promote some type of discount in the driver decides to put a certain amount of money down on the car at the time of purchase.
On the other hand, one can choose not to put any money down if cash is not readily available. This is an option regularly selected by students due to the fact that many of them are not employed during their university careers.
This enables them to secure their automobile for little to no cash at the time of purchase. There is a trade-off to this, however. A small down payment, or none at all, will result in both more payments extending for longer periods of time, as well as higher interest rates.
Financing A Car In College For Students:
- Consider this option too!
Another option which remains popular with students is deferred payments until after their schooling has concluded. This is a routine part of students’ loans to finance their education, whereby the banking institution approves a loan and does not request an initial payment until the student has completed their studies. This is one of the best options about financing a car in college for students.
A similar proposition is posited for car loans for students; they would not have to make their first payment until after graduation. Of course, the drawback to this plan is that interest on the money borrowed will continue to accumulate during the interim period between taking out the loan and the students’ graduation.
The result of this is that the original loan may end of being much higher to pay back when the student is ready to begin making payments, and it could take significantly longer to recompense fully.
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- There is also the possibility of zero percent financing.
This allows the individual to repay the loan in due course without accruing interest. Typically, a substantial down payment is required at the time of purchased in order to qualify for this deal.
Moreover, a missed payment may result in this bargain becoming null and void and resulting in a tremendous increase in the rate. However, zero percent financing, especially geared for students, has become popular in recent years due to lagging car sales in the United States because of the slow economy.
In order to boost sales, dealers and manufactures have had to come up with a whole host of incentives in order to move cars from their lots. Zero percent interest loans are one manifestation of this ingenuity.
Financing A Car In College For Students: Take care of this!
There can be various catches which are associated with such promising programs. For one, the student’s credit must be in good standing.
This is often a difficult criterion for university aged people to reach because most of them either have no credit, or have the usual low scores for those just starting to build a credit line.
Secondly, the borrower must demonstrate that they have sufficient income to cover their daily expense. Again, this is a tough qualification due to the fact that many students are not employed while they are studying.
Finally, another snag is that students may sometime be forced to prove that they will have a job after 90 days of their graduation. For some, this may not be a problem. Many students, however, do not have guaranteed jobs lined up as soon as they are down with college. Thus, this financing option may not be feasible for all.
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Once again, it really depends on the individual with respect to how much one is willing to spend. Generally speaking, college students do not have much discretionary income at their disposal to spring for a brand new corvette.
However, as lenders are in constant competition with one another, accentuated all the more in the context of the global economic downturn, rates are now available for young adults at rates which are so low that they would have been inconceivable even a few years ago.
In order to secure the best possible loan, one must do their research ahead of time, ascertain exactly how much one is willing to spend, factor in additional costs such as insurance, gas, and maintenance, and then one will be able to determine the best car for them and the most advantageous price.