Whether you’re just off to college and need some wheels or are a mature student learning new things, we can help. Financing a car loan as a student may seems daunting, but as St. Catharines auto loan experts, we are perfectly placed to secure competitive finance for your new car.
Students face a couple of extra challenges when it comes to accessing auto loans. Challenges we can help with.
Here’s how to get a car loan as a student.
Check your credit report
All auto loan applications begin here. Whatever your age or income, the process starts here. Auto loans are tied to credit scores and lenders will use your credit report to decide whether to lend to you or not.
Therefore, you need to check to make sure your credit report is accurate, includes everything and that your credit score looks right.
If you’re a young student, you won’t have a particularly high score. This isn’t a bad thing, it just means you have yet to create a good score. It will mean paying higher interest on the loan but shouldn’t stop you getting one.
Work out your income
The main challenge for most students looking for auto loans is having sufficient income.
You’re studying so won’t be able to work full time. That means part-time or freelance work is your main income stream. Being able to earn enough to convince a lender you can comfortably afford the auto loan is going to be your main challenge.
If you have the time, consider taking on more work or another job. The more income you can show, the more likely you are to be accepted for the loan.
It’s a tough ask considering you’re studying and want to live a little but if you want a St. Catharines auto loan, it’s what you might have to do.
Set your budget
We always recommend setting a budget before you start looking for cars. Ever heard the term ‘champagne taste on lemonade money’? That’s very true with cars.
Most of us have a tendency to want cars that are out of our budget. Having that budget already in mind before you go shopping should stop you falling in love with something you cannot afford. We say should…
Your budget should include your down payment or trade in and the amount you could borrow to come up with a usable figure. Use an auto loan calculator to do the rest.
Preapproval for A Car Loan as A Student
Auto loan preapproval is a litmus test to see if you would qualify for the amount you want to borrow with the credit score you have.
It isn’t a loan offer and won’t impact your credit score. It’s a dry run to see if you could qualify without having to apply for a loan. If you don’t qualify for the amount you want to borrow, lower the loan amount or increase your down payment, whichever you’re most comfortable doing.
Apply for the loan
Once you’re this far, you’ll need to find a car within budget and apply for the loan. Prepare all your paperwork in advance, bring proof of ID, address, of income, bring your driver’s licence and any supporting evidence of savings, of part time work and of anything else you think might support your application.
Our team will do the rest!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!