Can a Student Get a Car Loan?
Financing your car is a great way to drive home in the vehicle you want without putting too much of a dent in your budget. However, can a student get a car loan?
All drivers can get a great car loan, including students. So, if you're in college and are thinking about financing a vehicle, here's your guide to how students can get car loans.
1. Build Your Credit
Students can get a car loan easily. All you have to do is fill out the application at the dealership to see if you get approved. However, if you want the best and most affordable rates for your budget, you'll need to start building your credit before your car shopping trip.
College students typically have low or no credit scores. To build your credit, you'll need to apply for a line of credit, like a credit card, to get started. Once approved, you're free to start using it as needed. However, you'll want to be careful of how you use it.
To improve your score, you'll need to keep your balance below 30% of your credit limit and pay off each statement on time each month. On top of that, it's recommended that you limit the number of credit accounts you open within two years, as applying for too many within that span can lower your overall score.
2. Get a Cosigner
If you have low or no credit, getting a cosigner can help a student get a car loan. A cosigner is someone who signs the finance application with you. The person you have signing your finance agreements with should have a good credit rating. That way, you can boost your chances of getting approved for a finance plan with more affordable terms.
The cosigner automatically agrees to share the same responsibilities of paying off your car loan when they sign the contract. This means if you default on a payment, they'll need to make the payment for you. So, make sure you stay on top of the monthly payments for your car loan to avoid having your cosigner pay and to ensure your credit remains in good standing.
3. Make a Down Payment
One of the best things you can do to get approved is to make a down payment if you're a student getting a car loan. A down payment can go towards the price of the vehicle you're looking to buy. So, when you apply for financing, you'll end up needing to borrow less from lenders, which can improve your chances of getting approved. Overall, the more you put down on a car, the more likely you are to get the right car loan you need.
You can also use your current car as your down payment. Just bring it to your dealership when you're ready to buy, and the service team will inspect it to determine its value. Once the value of your current vehicle has been established, you can use that as your down payment.
Finance a Used Car Today
With the right tips and information, college students can get a car loan with the affordable terms they need to drive home happy. So, if you're ready to finance a great used car, contact Val-U-Line® for more details and check out our stock of competitively priced pre-owned vehicles today!