Once you leave school and start studying at university or TAFE, owning a car can be high on your list. And as it can be hard to save enough cash to buy a reliable car, a car loan might seem like a good idea.
However, most lenders ask that applicants be in a position to repay the loan, which usually means being in employment. The problem for most students is that the available jobs are usually part-time and lower income.
For this reason, lenders require some kind of security. This gives them the legal right to access alternative funds to cover the loan if you’re unable to keep up the repayments. The security may be the vehicle itself – in this case, the lender can repossess the car and sell it, sometimes for less than you still owe, meaning that you’ll still be making payments despite having lost the car.
If you are lucky, your parents or partner may provide security by acting as a guarantor who will be responsible for any debt you incur.
Once you’ve figured out what you can afford, remembering all the hidden costs involved on top of the car price, it’s time to shop around for a loan. For yes, you do have some options, although you may find many lenders want to charge a higher rate of interest because you’re a student.
Do your research in order to find the deal that works best for you. Look at the type of loan on offer and compare the interest rates and terms (duration) offered by financial institutions and car finance companies. Can you meet the monthly repayments? Is the total amount you will pay by the end of the loan period reasonable?
Buying a car is a major financial responsibility and as a student it’s more difficult, but it’s not impossible. By finding the student car loan that suits you best, you can enjoy the benefits of car ownership, while remaining free of the financial anxieties.
Are you looking for finance to help you purchase a new vehicle?
1800Approved is one of Australia's fastest growing car and asset finance brokers. We specialise in car finance, equipment finance, plus insurance and warranty services, and have previously arranged deals from AU$10k to AU$5m.
1800Approved services clients accross Australia, working with over 30 independent lenders to find the best deal.
We can also help with sourcing your new and used car warranty, and by sourcing vehicles and equipment through our Drive Wholesale arm.
To learn more about how we can help you, call us today at 1800 277 768
Topics: Car loan