Search for different lenders that provide car loans for students. Using the Internet will help narrow the field of prospective finance companies to those who work with specific types of students. Finding the right company is important because it will make the borrowing process specific to the student.
Find out if your bank or credit union might be willing to give you a few perks when you get a loan. See if there are options for lower interest car loans or if there might be a repayment plan that is longer. This would be a good one because most students are not able to work full time while attending college. You might even be able to get more rate reductions if your parents have good credit and are willing to cosign for you.
To best account for possible reductions in loan costs, and options that will give you more freedom in how to pay your loans in the future, consider the following:
- Find out about eligibility. Lenders offering these kinds of loans often include specific eligibility requirements (that are not always advertised). The best way to find out is to apply and see whether the lender will approve your loan.
- Check out interest rates. Before you sign on a loan, you need to know if you are comfortable with the APR or interest rate offered. For unsecured student auto loans, the interest rates will generally be pretty high. Take a look and consider the eventual cost before going further.
- See how some basic changes will affect the loan. Ask about how a larger down payment or higher monthly payments could help with getting better rates or approving a loan.
- Plan out payments. Since the terms of these loans are generally fixed rate terms, the borrower can plan out their payments down to the penny. This helps a lot in budgeting and making sure the income can handle the monthly payments that are expected.