Most people would tell you that having a car means independence with freedom to go where you like when you please. Sometimes, as nice as owning a car is, it becomes a millstone if you are struggling to pay for it. No more so than for young people just beginning their independence! Some students, like some people in the demographics, need a car. It is essential and so is a car loan. But which car loan will be the right one is a whole other question. So many people have so many questions regarding car loans, but here are the two most common ones answered for you to make the right move.
How Do You Choose the Best Loan Term?
How much you end up paying for a loan depends heavily on the loan term. You pay significantly different amounts for a 36-month loan as compared to a 60-month car loan. How do you find what suits you? Well, you can go online and use comparison sites to find different loan options. But again, you will have to do some homework to determine what you’d end up paying for in total for any particular loan. One idea is to use a car loan calculator. They are easily available online. Here, you can find loan payment amounts by entering the loan term along with the interest rate into the online calculator. Once you know what to expect you will be in a better position to compare different deals and loan terms.
Is it possible for Students to Qualify for a Car Loan?
It is always more difficult to qualify for a loan when your credit score is less than perfect and it is not likely that students have a high credit score. Most don’t have enough time being financially independent to build a credit history. Therefore, it is tough to qualify for a loan. It’s a challenge finding one suitable for the student pocket but, whilst they are available, they come with a high APR. You may be offered a lower rate if you are in part-time employment but it will still be higher than the norm. Moreover, you may only qualify for an extended-term loan – it will have smaller monthly payments but again, a high interest rate is the price. To get a good deal, you consider exploring online options and use their resources to conduct your research and finalize a better deal.
Making inquiries is one thing. Signing up to a lengthy financial agreement is quite another. Before you even go near a pen, make sure you understand exactly what is expected of you and what you can expect from your company. If that means asking questions again, do it. It is in a company’s interest to have you as a fully informed customer. The important information, the APR and repayment details are something a good company will make an effort to explain. So, go for the right one only!