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Tips for getting a great student car loan

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Tips for getting a great student car loan

Being a student is your first real taste of independence and nothing else ever comes close. Having your own car adds to that feeling of independence but with so many more demands on your money, can you really afford one? You can if you budget carefully and get the right car loan. That’s what this post is all about.

Car Nation Canada works with all kinds of people to deliver great value car loans. Students are just some of them and we have helped numerous students get a great deal. Here are some lessons we have learned in that time that have helped students get that great deal on a car loan.

Build your credit

Students are regarded as higher risk borrowers than employees and you have to work hard to overcome that. A sure way to lower interest rates is to prove you’re a good investment by building your credit score. You won’t have much of a credit record so it’s time to build one. Get a low interest credit card and buy your groceries or gas with it. Pay it off each month and your score will gradually increase.

Basic is best

Come to terms with the fact that luxury vehicles will likely be out of reach for a while. Go practical, go reliable. Buy a well known model from a reputable manufacturer. Read reviews, talk to friends and get an idea of what cars are cheap to insure, service and repair. Domestic models usually perform well in this regard but do your research and you should be fine.

Save for a down payment

A common tactic for lowering the cost of car loans is saving a large down payment. The larger that payment, the lower the loan and the lower the interest rate. If a lender knows they have a much higher chance of recouping any potential losses, you are more likely to be approved and should get a lower rate.

Ace your GPA

Some lenders actually offer lower rates to high performing students. Fair or not, a few lenders will offer lower rates to high GPAs as it shows dedication and sensibility. If you’re performing well, you could potentially get a cheaper car loan. If you could perform better, a cheaper car loan could be an important extra inducement.

Keep your loans separate

A student loan and car loan should never be mixed. While a larger down payment is always a good idea, don’t use your student loan to pay it. Life is tough enough as a student without blowing your student loan on a car. Use that to pay for school and use a car loan for a car. A car loan is shorter, easier to pay off and should have a lower interest rate so use that in your favour.

Want a great deal on a car loan? Visit Car Nation Canada. We can help!

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