There are around 20 million Americans enrolled in colleges and universities throughout the country right now. At least some of them can get away with making it to their classes without cars.
But the vast majority of them are going to need to have access to their own transportation in order to succeed in school. They’ll have to figure out how to get a car loan for college students to put themselves into the best possible position.
They’ll also need to look for the best car loan for their specific situation. From classic car loans to other types of car loans, they’ll need to look high and low for the right options.
Are you in the market for your very first car loan? If you are, we’re going to show you how to finance a car so that you’re able to get your hands on a loan for a new car fast.
Continue reading to check out our guide on how to get a car loan so that you know what you’re doing.
Start by Taking a Look at Your Credit Score
There are some people who wait until a little later in life to enroll in college. But studies have shown that the average college student is around 21 years old.
If you’re somewhere in this general age range, you might not have the slightest clue as to what your credit score is right now. It’s why you should kickstart your search for a car loan for college students by seeing where your credit score stands.
It’s very easy to sneak a quick peek at your credit score right online within a matter of just minutes. But unfortunately, you might not love what you see when you do.
Unless you’ve purchased a car in the past or been using credit cards for a few years now, you might not have a credit score that’s all that high. And this could prevent you from getting the best terms on a car loan when you apply for one.
Do What You Can to Give Your Credit Score a Boost
If you look at your credit score and love what you see, you won’t have to worry about trying to improve it. But if it’s still on the lower end of the spectrum because you haven’t established yourself as a trustworthy credit user yet, you will have to begin to work to change that to improve your chances of getting approved for a car loan.
How can you do this? Well, for starters, you can put your cell phone into your own name and make sure you pay your bill every month. You can also apply for one or two credit cards and get yourself into the habit of paying for things with them and then paying off your balances almost right away.
Within just a few months, you should be able to increase your credit score by leaps and bounds by taking these kinds of simple steps. It won’t be long at all before you have a credit score that’s high enough to qualify you for a new car loan.
Find a Job So That You Can Show You’re Making Money
Before lenders even think about offering classic car loans to you as a college student, they’re going to want to know that you’ll be able to pay them back. To do this, you’re obviously going to need to have a steady income coming in each and every month.
You don’t necessarily need to be running a Fortune 500 company to qualify for a car loan. But you should have at least a part-time job that will provide you with enough money to take care of your car payments.
With this in mind, you should look into getting some kind of job before you put in any car loan applications. It’ll make you a much stronger applicant in the eyes of those lenders that specialize in dishing out car loans.
Consider Asking a Family Member to Serve as a Cosigner
If you aren’t able to get a job while in school because of your workload or if you have a job that doesn’t pay you a whole lot of money, you might not be able to qualify for a car loan on your own. But you might be able to convince lenders to give your application a second look if you have a cosigner in place.
A cosigner is someone who will sign for a car loan with you and agree to help you pay down your car loan if the need should arise. Lenders will often look more favorably upon those college students who have cosigners.
Ideally, you should try to see if a parent, a sibling, or another immediate family member will agree to serve as a cosigner for you. You shouldn’t have too much trouble getting a car loan when this is the case.
Conduct a Search for Classic Car Loans for College Students
Once you get to this point, you’ll officially be ready to start searching for classic car loans for college students. You should cast a wide net when you’re doing this in an effort to find lots of lenders that would be willing to take a chance on a college student who is looking for a car loan.
Googling something like “car loans for college students” should bring up a list of potential options. You should do your homework on each of these options to see what they’ll bring to the table.
No matter what, you should not dive headfirst into taking out a first-time car loan without learning about the lender that you’ll be taking it out from. You want to find a lender that’s going to understand your situation and work to make your first experience with taking out a car loan a good one.
Fill Out an Online Application for Your First Car Loan
After you find a lender that looks like they would be a good fit for you, you should be able to apply for a car loan through them right online. Most lenders these days have online applications that college students can fill out when they’re in need of a car loan.
The great thing about taking this approach to taking out a car loan for the first time is that you won’t have to spend all day doing it. You also won’t have to wait around for days on end to find out if you’ve been approved for a car loan.
More often than not, a lender will let you know whether or not you’ve been approved for a car loan on the spot after gathering some basic information from you. It’ll make the process of shopping for a first car loan so much less stressful than it would be otherwise.
Look Through the Car Loan Terms You’ll Be Able to Get
If everything goes according to plan, a lender should approve you for a car loan shortly after you apply for it. They should also provide you with a list of their car loan terms.
You might be tempted to jump at the opportunity to accept the car loan that you’ve been given. But you should pull back for a second and make sure that you analyze the terms that were given to you first.
First and foremost, you’ll want to evaluate the interest rate that you were given by a lender. The lower that this interest rate is, the better off you’ll be in the long run. You don’t want to get stuck with an interest rate that’s too high since it’ll inhibit you from being able to pay down a car loan in a timely fashion.
You’ll also want to look at how long it’ll take to pay off a car loan. Some lenders have started to offer 72- and even 84-month car loans. This may or may not work for you depending on your situation.
Whatever you do, you shouldn’t just gloss over the car loan terms that you get. You should go over them with a fine-toothed comb to make sure they’re acceptable to you.
Try to Extend Your Car Loan Repayment Term as Much as You Can
As we just mentioned a moment ago, there are some lenders that have started to dish out car loans that extend over the course of six or seven years. They do this to make cars more affordable for those who will be buying them.
Some people would prefer not to stretch their car loans over those lengths of time. They hate the idea of having to spend more than half a decade repaying a lender.
But when you’re in college, this might actually work to your benefit. You can bring your monthly payments way down by stretching a car loan out over a long period of time.
If you’re concerned about how high your monthly car payments will be when taking out classic car loans, you might want to at least consider extending your repayment term. You can always go back and refinance a car loan later to pay it off quicker if you would like.
See If Your Good Grades Can Earn You a Discount on a Car Loan
Have you gotten really good grades throughout the start of your college career? If you have, this might be something that you can use to your advantage when you’re applying for a car loan.
Some lenders will actually provide you with a discount on a car loan if you’re able to prove that your GPA is high enough. They’ll look at you as a more responsible borrower simply because of the grades that you’ve been able to put together.
There are other lenders who aren’t going to care about your grades in the context of you taking out a car loan. But it definitely wouldn’t hurt to ask whether or not your grades might benefit you when it comes time to take out a car loan.
Find Out If You Might Qualify for Any Other Car Loan Discounts
Getting good grades is one way that you might be able to earn a discount on a car loan. But it’s far from the only way that you can try to do it! There are also other steps you may be able to take to bring the total cost of a car loan down.
Here are several things that you might want to try to get a better deal from a lender who will be giving you a car loan:
- Agree to sign up for an autopay program to pay down your car loan
- See if your bank or credit union has a special car-buying program in place
- Check with a lender to see if they offer better deals to those who buy cars from certain dealerships
Every little discount is going to help when you’re buying a car with your first car loan. They’ll all add up and could result in some really big savings for you.
Commit to Purchasing a Car You Know You Can Afford
People used to be able to buy new cars for under $20,000 without a problem. But those days are long gone!
Today, you’re going to have to shell out almost $50,000 on average for a new car. And even if you decide to go with a used car, you could be looking at spending anywhere from $20,000 to $30,000 on average depending on what kind of car you want.
If you get approved for a certain amount of money when applying for a car loan, you might feel the urge to spend every last dime that a lender gives you. But you should remember that you don’t have to spend that much money on a car if you don’t want to.
The only thing that you need from a car in college is reliability. You need to be able to depend on it to get you to and from your classes so that you don’t miss anything important.
You don’t need a car that is going to wow people when you’re driving it all over town. You also don’t need a car that comes with all the latest bells and whistles.
If you can afford to buy a car that comes with these things, great. You’re more than welcome to purchase it. But you shouldn’t overextend yourself and buy a car that’s going to push your bank account to the brink every month.
Put Down the Biggest Downpayment That You Possibly Can
Do you have a bunch of money sitting in your savings account right now? If you do, you should leave at least some of it in there for a rainy day. You never know when you might need it!
But you should also give some serious thought to using some of your savings for a downpayment on a car. By putting money down on a vehicle, you may be able to bring your monthly car payments down dramatically.
Again, you don’t want to leave yourself without at least a little bit of money in your savings account. You could be asking for trouble if you’re ever unable to work and can’t pay for your car for a few months.
But at the same time, you shouldn’t be shy about putting down a sizeable downpayment if you have the cash to do it. It’ll make a big difference in your ability to pay down a car loan quickly over time.
Figure Out How You’re Going to Make Your Monthly Car Payments
When you first finance a car, you might not have to make any payments on it for a couple of months. But after that brief window of time, you’ll have to make a car payment every month for at least a few years in most cases.
How are you going to do that? This is a question that you should make sure you’re able to answer before you even think about taking out a car loan.
As we alluded to earlier, you should try to get a job that will pay enough to cover your monthly car payments. But you should also see to it that this job will provide you with enough money to pay for things like gas, oil changes, car repairs, etc.
If your income isn’t going to cover the costs associated with these things, you may not be able to make all your monthly car payments. It could put you into a tough spot and make you wish you had thought more about taking on a car loan.
Avoid Missing Any Car Payments as a College Student
If you ever find yourself in a place where you can’t afford to make a car payment, you might just shrug your shoulders and not make it. What’s the worst that can happen, right?
Initially, nothing bad is going to happen to you or your car. But if you continue to miss car payments month after month, the situation is going to spiral out of control before long.
Your lender will start to report each of your missing payments to the credit bureaus. This will destroy your credit score and make it difficult for you to ever get approved for another loan. It could even put your student loans in jeopardy if you’re using them to pay for college.
Your lender might also look into repossessing your car if you don’t work out any kind of repayment plan with them. This is pretty much the worst thing that can happen since it’ll leave you with a low credit score and nothing to show for it since you won’t have a car anymore.
As you can see, it’s very important to stay on top of your car payments as a college student. You might have to make certain sacrifices that other college students won’t have to make to ensure you don’t miss any of your car payments.
Think About Using Your New Car to Make Extra Money
Once you get approved for a car loan and buy a car, one way to stay on top of your monthly car payments is by using your car to make extra money when you can. There will be so many opportunities for you to increase your income by putting your new car to good use.
Here are several ways in which you can bring in more income with a new car:
- Sign up to be a driver for a ridesharing service
- Apply for local pizza delivery jobs
- See if renting your car out when you don’t need it might be an option
Bottom line: You can—and you should!—try to utilize your car to make more money. If you’re able to do this, you can help your car to pay for itself over time. You might be surprised to see all the different things you can do to turn car ownership into cash quickly.
Just Because You’re a College Student Doesn’t Mean You Can’t Get a Car Loan
Taking out classic car loans didn’t use to be something that college students could do. Once upon a time, lenders would balk at the idea of approving college students for car loans.
But in this day and age, many lenders are more open to the idea of approving college students for car loans. You should take full advantage of this by applying for a car loan now and trying to get approved.We can help you get your hands on the car loan that you need. Contact us now to start the application process.