Auto Loans for College Students

The Federal Reserve recently released two reports: the Senior Loan Officer Opinion Survey and its monthly Consumer Credit report. According to the first report mentioned, banks have tightened their lending standards. That does not bode well for the U.S. economy.

There has been a weaker demand for C&I loans, which is a reversal over recent quarters. Fewer businesses are attempting to open new lines of credit, as well.  While the consumer credit report showed strong growth of $7.4 billion (seasonally adjusted), student loans provided the bulk of the change. If student loans are not accounted for, then consumer credit continues to fall. If you remove student loan originations, the last quarter saw a $1.5 billion contraction.

Over the same period total vehicle sales came in at 200,000 units above the previous month. The majority of cars are financed, and when looking at all the data side by side, the numbers are hard to reconcile. Credit numbers are down, yet car sales are climbing? Are some students using loans to buy cars instead of paying tuition? The numbers released by the Fed in the consumer credit report showed new car loans had declined by 2.75% from the fourth quarter of 2010, yet new auto sales for the period increased 3.97%. It makes you scratch your head in wonder. There has to be an error somewhere in the data.

The Hyundai Veloster is a hodge-podge of styles and designs, but somehow it works. The vehicle offers descent fuel efficiency as well as the room needed for college students to get their friends around town. Let’s have a quick look at what the Veloster has to offer.

The Veloster features a small 1.6-liter, four-cylinder engine. The engine provides what some might consider a meager 138 horsepower and 123 pound-feet of torque. Hyundai says that a turbo-charged version will appear later. The car offers a standard six-speed manual for 40 mpg on the freeway and 28 city. The ponies and mpg out perform the Honda CR-Z, making the Veloster a much better deal for the $18,000 base price. For a brand new car, that’s a pretty reasonable amount to finance, even if you need a low credit score car loan.  Other features include a seven-inch touch screen that operates everything from the Bluetooth to the stereo. If you opt for the navigation system, you will also get a rearview camera. There is also an optional service called Blue Link that sends parents a text if the car breaks a ”geo-fence” or will make you aware of speeding and past-curfew driving.

This car will not handle like a Benz, but it offers most of the things that a college student will need to get around town. Given the MSRP, it is a great deal for many graduates or their parents.  Find out more at New Car Quotes.

Living debt free is a lot like losing weight when you are over 50 or kicking crack cold turkey. You know you should do it, but why? It is going to hurt…a lot. You are going to get mad and have an itchy card hand when you see something that you really want. To help here are five useful tips to help you live debt free.

Drop That Debt!

• Don’t pay with your credit card unless you have the money in the bank.
• Save 10 percent of your income.
• Anticipate your expenses. It is hard to avoid credit cards at Christmas unless you have planned for the expense of presents and saved money.
• Give to charity. Many buy on credit cards because they feel entitled to have what they want. Giving to someone who can not do that can help.
• Watch your credit score. A low or non-existent score can cost you thousands in higher interest rates, especially if you are trying to get an auto loan with no credit or bad credit.  You can also expect higher insurance premiums, home loan rates, and other incidental expenses.

There isn’t a single tip on the list that doesn’t sound like common sense, but most people do not think they need to control their spending habits. It is almost like an addiction. Admitting that you have a credit card problem is the first step. Are you ready for the next?

Did you know that, according to reliable sources such as Mint.com, the cost of college tuition is rising at twice the rate of inflation?  Many expert point to easy credit as the culprit, for the Federal govt has allocated an extra $6 billion for student loans.

The Cost of College Today

If you haven’t looked at recent statistics on the price of tuition these days, it’s pretty staggering.

Students entering their freshman year in the fall of 2009 at private universities can look forward to paying just under $150,000 for their degree (75% of which, or nearly $110,000 is plain old tuition, the remainder being room and board).  Tuition at public schools, on the other hand, will run about 60% of that, or slightly more than $60,000.

What about Grad School?

So now that we have your undergraduate degree covered, the next question is how much a postgraduate  degree will tack on.  For law school, you’re looking at about $90,000, and $125-$130,000 for medical school.  These days, it seems like a lot of new graduates are opting to go to law school as an alternative to the job market.  But even at the lowest end of the spectrum, a freshly-minted law school graduate can expect to be saddled with $150K in debt.

Student Loan Consolidation

Many graduates staring student loan debt in the face are hopeful that consolidation will be the answer.  There are various options for both private and federal loans, though many students have complained that they’ve been turned down for lack of credit, especially by private institutions.  This is where a smart, modest, completely affordable car loan might help you by building you some credit.  That said, such an option is usually best if you have a) a job during school, b) a cosigner, or c) BOTH (the most ideal).

Is it Worth it?

So I’m sure this is the question you’re asking yourself since I’ve hit you with so many scary stats:  is a college education still worth the cost??

You’ll be happy to know that the resound answer is YES.  How come?  Well, according to a variety of creditable sources, having a college diploma will enable you to earn, on average, anywhere from $800,000-$1,000,000 more than your non-college-educated peers.  That little data-point really throws things into perspective, doesn’t it?  All of sudden, the scariest statistic is NOT going to college.

Tags college tuition, cost of college, student debt, student loan consolidation, student loans

As we’ve previously discussed, having a job will make lenders much more likely to extend you credit. Simply put, it shows them you can afford to pay off your loan. Typically they look for a duration of employment of 6 months or more.

Car Loans for Students without a Job

Due to all kinds of factors, from GPA priorities to a desire to enjoy the college experience, about 50% of college students are not employed (according to 2004 Census Data). So how can you get a car loan if you don’t have a job? The answer is that you’ll almost surely need to find someone to cosign your loan — usually a parent — and of course you’ll need some kind of income to make your payments.

Basically, if you can’t show steady income from independent wealth, inheritance, or investments, your auto lender will see you as too high-risk a borrower. If, on the other hand, a parent or other creditable person is willing to cosign for you and give you the money to make your financing payments month in and month out, you may well be able to qualify for car loans for students without a job.

Be wary of any dealer or finance company who tells you that you don’t need either a job or a cosigner — a deal like that sounds too good to be true, and probably is.

Tags car loans for students without a job, student auto loans

Matriculation at a college or vocational school very often brings up the topic of needing a new car, and for most students, that means trying to get approved financing. The process of hunting down a student auto loan can be both exciting and challenging. As one financial expert has said:

With [a student auto loan] in hand, you can purchase your own car, in your own name, with your own money.

But some of the characteristics of a typical student can make you a pretty high-risk candidate in the eyes of finance specialists. Some of these risk factors which can make it a hassle to get one of these auto loans for college students include: no credit, no money, no vehicle trade-in or down payment, no full-time job.

But whether you fall into all or none of these categories, it is quite possible to find an auto loan package or program that works for you – especially if you do your homework.

How to Make your Student Auto Loan Application More Enticing to Lenders:

1. Getting your loan cosigned: finding a co-signer for your loan’s good credit can allow primary borrower to qualify for better interest rates. As a student, your parents or an older sibling with established credit are good options.
2. Cash or trade-in vehicle for down payment: if you can cover a significant portion of the new car sticker price, you’ll not only reduce your monthly payments, but lenders will be more willing to give you a loan because if you ever default, they won’t have to sell the vehicle for as much money to cover the outstanding balance.
3. Part-Time Job: if a loan officer sees the word “Student” under the Occupation section of your application, you’re going to have much less of a chance of getting your loan than if you can show them that you have some measure of steady income from a part-time job.

Doing Your Homework is Key.

If you simply do not have any money for a down payment, don’t lose hope. There are options like 0 down car loans, some of which are not TRULY no money down, but use new car rebates and vehicle trade-ins to help you meet the minimum car lender down payment requirements without putting down any actual cash.

With both of these factors in tow, and a measure of good credit on your record, then you may be able to qualify for student car loans with no cosigner. But if you can find a person with good credit to cosign for you, they will truly max the quality of your application in the eyes of lenders, which will have positive effects.

Why Finding yourself a Cosigner is so Important:

• Improved chance of approval
• Wider range of financing options
• Decreased interest rates and finance charges
• Lower monthly car payments

With preparations squared away to complete the application, you’ll need to know the optimal places to start. Your local auto dealership is not one of the optimal places to start — you’ll be in a better negotiating position if you have your financing already approved by an outside party.

We recommend instead that you try to get your auto loan preapproved first. Preapproval will put you in a much better bargaining position when you step onto the dealer lot, and one of the top sites to find it is on the internet.

Websites offering application services allow you to complete the application in under five minutes and receive your acceptance status in 24 to 72 hours. It’s important to note that all auto financing sites on the web require you to give consent to the lender to perform a credit inquiry.

Consider your auto financing terms judiciously before you decide to sign the agreement. STUDY the small print, and beware of “blackhat” dealer tactics such as yo-yo scams and unnecessary add-ons such as extended warranties and credit insurance. Some of these options are worthwhile; others are not.

If you do your homework and take to heart the advice here outlined, you could be driving your new car, truck, SUV, or motorcycle to campus in no time flat.

Tags auto financing, auto loans, bad credit, car loans, college students, no cosigner, no credit