Financing 101 | How Auto Loans For College Students Work
Having reliable transportation can open up a new world of independence for you, but many people can't afford to buy a newer car with cash only. Instead, you might need a car loan to finance your auto purchase. Before you make any decisions about a loan, however, you need to make sure that you understand the basic information about how a car loan works.
Factors that impact your payments
There are many different factors that can impact the amount you will pay monthly for a car loan. The down payment, the amount that you finance, the annual percentage rate and the loan term are four primary factors in this equation:
- -The down payment is the amount of cash you pay upfront in order to take possession of the car.
- -The amount that you finance (aka loan amount) is the cost of the car minus the down payment.
- -The annual percentage rate(APR) indicates the amount of interest you will pay based on the outstanding balance of the loan.
- -The loan term is the number of months it will take to pay the loan off.
Boro offers college students with flexible loan terms. When you are trying to determine the best loan schedule for you, be sure to think beyond the monthly payment amount. There's no such thing as a ‘best payment schedule plan’ since there will always be a compromise between monthly payments and total interest. For example:
- -Making payments over a longer period of time will reduce your monthly payment amount, but it will increase the interest.
- -Making payments over a shorter period of time will increase your monthly payment, but you won't pay as much in interest.
Once you have your vehicle
Once you secure the financing for your vehicle, you need to make sure that you register your vehicle with the state. You will need to get insurance coverage that meets or exceeds the state minimum coverage so that you can get license plates for your car.
It is important to set a budget that allows you to make your car payments while still covering maintenance, gas, and other related expenses of the vehicle. One of the most important benefits of purchasing your vehicle with a car loan is that you are able to build up your credit if you are making payments on time. This shows the credit bureau/ future landlord/mortgage provider that you are financially responsible.
For people in the United States who don't have a Social Security Number or credit history, such as many international college students, finding a car loan can be challenging. Boro is willing to give you a chance to get a car loan that will help you to establish your creditworthiness. You do not need any SSN, credit history or co-signed to apply.
With a Boro auto loan, here's all you need to do:
- -Apply and get approved for your loan online
- -Find a car you like at the dealership
- -Sign the documents and pick up your car!
Contact us to get started!