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Student Car Loans In Canada: Your Easy Guide To Approval

Student Car Loans In Canada: Your Easy Guide To Approval

If you're looking to buy a car as a student, these tips from our auto loans team are going to make your car buying experience a lot more fruitful by showing you how to get student car loans.


The pandemic has changed the way we all live and work but what hasn’t changed is our need for a car to get around.


You have many choices in front of you, are you aiming for a conventional, hybrid, or electric car? What are your budget and current/future car needs?


All of these questions can seem overwhelming but we are going to help you address them with ease.

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Use Your Student Status

There are many benefits to being a registered student in Canada, one of which is better car loan rates for students with top tier grades. Yes, doing well in school can in fact get you better student car loan options.


In order to verify that with a lender though you will need to get some paperwork, you’ll need proof of your enrollment in the college or university and you’ll need to prove your grades.


Have a Stable Job

It might seem obvious that you’ll need an income in order to pay off a loan, but it bears repeating. Specifically, you’ll need to be able to prove that you can reliably pay the monthly amount without issue.


If you have a stable part-time job with regular pay then this is easy, if you make your money some other way like contract work or commissions as an artist then this will be harder to prove.


50 30 20 budget rule


If you’ve been doing it for a few years then you may be able to prove it with tax returns, if not, then unless you take on a properly paying job getting a loan is going to be exceptionally difficult for you.


Find a Co-Signer

A cosigner is someone who signs the student car loans alongside you and takes on the responsibility that if you should default on the loan, they’ll pay off your debt instead. It requires a lot of trust in you and it’s typically done by a family member like a parent or spouse.


However, the advantage is that it allows you to qualify for loans that you normally wouldn’t, because the bank sees the loan as less of a risk. Just make sure that your cosigner has a good credit score and history, otherwise, it won’t quite work as planned.


Do Your Research

There are many other ways to make the student car loan process easier for you. A good place to start is your school website.


Most colleges and universities have deals with lending companies that will give you discounts on your interest, and those are of course the companies that you want to start with.


You may be surprised by how much of a loan is negotiable if you know what you’re talking about, for example, you may be able to reduce monthly payments by increasing your down payment.


Determining Your Car-Buying Budget

This is the first step, most of us don’t think about the total price of a car but look at the monthly payments.


how much to spend on a car based on income


Take a look at your budget and see how much cash you have available for a car payment, are you able to reduce your spending in other areas so you have more funds to put towards your new car?


You should leave some wiggle room in your budget for unexpected expenses, if you are not sure how much to set aside, we will let you know how to work that out in a little while. Click here to access our car loan calculator.


Credit Score Review

Your credit score is the first thing prospective lenders look at so you should check out your credit score to see whether there is room for improvement.


The goal is to have a credit score of 680 or higher, if your score does not reach 680 then you should take a closer look at your credit report to figure out what is causing your score to plummet.


Are you current with your student loans and other financial obligations? The main reason your credit score would be under 680 is not making payments on time.


Fortunately, you can turn things around by paying your bills on time but you will need to take action right away. With each passing day, your credit score will continue to drop.


Getting the Right Advice

We recommend heading to your local dealership and discussing your car buying needs with them. These dealerships are there to help you and earn your business.


The dealership will look at your credit profile and let you know what you can do to raise your credit score. Even if your score is not perfect, the dealership will know which lenders would approve your Delhi car loan.


These dealerships also have cars in their inventory that you can buy right away. Since there is a shortage of new and used cars available to buy, which is something you don’t have to worry about when dealing with a local dealership.


Buying a car is a major milestone in your life and by going through a local dealership, you will be able to get a great deal on the new car.


If you're ready for a car loan, we'd love to help with that! simply fill in the form below to get started.


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