4315 North Service Road, Burlington, ON, L7L 4X7
My Garage

Can students get a car loan?

Can students get a car loan?

One of the many questions we are asked here at Car Nation Canada is around the different professions or stages of life and whether they can access car loans or not. This week we are going to tackle one of the most common life stages, being a student. Can students get car loans?

The answer is yes, students can get car loans but you will need two things first. A good credit score and a steady income.

Students and car loans

Students are treated just like anyone else when it comes to credit. You need some kind of credit history, have a decent credit score or be working towards one and some kind of income.

The higher the income and your credit, the cheaper the car loan.

Challenges for student car loans

Those two requirements provide something of a challenge for most students. As you’re just beginning your journey, you won’t have much of a credit history. That will work against you but won’t prevent you accessing finance.

Do what you can to build a credit history. Pay on time, use credit where suitable and never miss a payment. It will take time, but over a couple of years your score will climb significantly.

The other challenge is that of income. Unless you’re one of the fortunate few, any regular income you have will be modest. Most jobs suitable for students will be minimum wage or depend on tips. This may not be enough to qualify for a car loan.

Solutions for student car loans

Every challenge has a solution and car loans are no different.

The solution to not having a credit history is to build one. Be careful with your finances, pay everyone on time and take credit where affordable and where it makes sense in order to build your credit history.

Securing an income is more tricky but if you can score a decent job, that will help. You can combine that with a larger down payment or cosigner for a car loan. If you absolutely need a car to get around, get to class or to work, you can ask for help from someone you trust.

Watch your grades too. There are lenders out there who offer competitive interest rates depending on your grades. While not mainstream, if you’re a gifted student, this could be a significant advantage.

Whatever your situation, you are going to have to get used to paying more interest than older siblings or family. It’s a reality of life like more expensive insurance and something you have to accept and plug away at over the long term. Accept this and don’t let it spoil what is arguably one of the best times in anyone’s life.

If you’re a student and want an affordable car loan, Car Nation Canada can help. Visit your nearest dealership and talk to us about your needs.

Categories: News

Tags: , ,