Many students in the United States of America earn through part-time jobs, while attending their classes in high schools and colleges. When juggling between these jobs and their education, owning a car can make commuting to different places very convenient. Using a car can save a lot of time, which can then be utilized for studies and work.
Many banks and financial institutions are reluctant and unwilling to grant auto loans to students, because they doubt their repayment abilities. However, if a student satisfies all the necessary terms and conditions and approaches the bank with full preparation, it is not impossible to get them.
How Can Students Get Auto Loans Sanctioned?
Students seeking auto loans fall into three categories, that is, the ones with good credit history, students with no credit history and the ones with a bad credit history. The interest rates charged to students with good credit are the least in the above-mentioned categories of loan seekers. These loans are unsecured, if the price of the car is not very high. On the other hand, they are secured with the vehicle itself as the collateral, if the cost of a car is too high.
These loans are made available by showrooms and car dealers who sell cars, through banks and financial institutions. It is expected that the student pays some amount as down payment and the rest is paid through the loan. However, there are many schemes in which the down payment amount is also taken care of by the loan providers. Though, you will need a cosigner in most cases, there is a possibility that you might not need one.
There might be a provision of starting the repayment of the loans, after securing a job, once college education is over. These loans are usually granted for a period of five to six years. It is obvious that the equated monthly installments (EMIs) will be more for a bigger loan.
With initial down payment (say around 20%), it is possible to lower the monthly installments. It is advisable to take loans, which you can easily repay, to avoid the confiscation of the car, in case of any payment defaults. You should also think practically about the fuel expenses, the cost of auto insurance, and maintenance charges, before you opt for an auto loan. In most of the cases, loans up to USD 25,000 can be easily secured.
While applying for an auto loan, you should fill all the professional and personal details properly and honestly. You will be asked to submit your age, address, employment, and income proof, along with the application form. In case, you need a co-signer for the loan application, choose a person who has a good credit history.
Students with bad or no credit history can secure loans by paying a bigger down payment amount, having a cosigner, and providing the requisite proof of employment.
The process of securing auto loans will not be complicated, if you satisfy all the terms and conditions, and complete the procedure systematically. You can surely go ahead with the idea of getting a car loan, if you have faith in your repayment abilities.