Helpful Tips for Getting a Car Loan as a Student

posted on Tuesday, August 25, 2020 in Financial Tips

Purchasing a ride as a student can be challenging, but not impossible. Fortunately, there are financial institutions like credit unions that offer auto loans in Iowa specifically for this purpose. Through them, you can score more flexible terms and lower interest rates.

It is important to note that every application is still subject to review by a lender. For this, preparation and proper planning are needed. If you want to increase your chances of getting approved, here are some steps you can follow:

Find a Steady Source of Income

The first thing lenders consider is whether you’re capable of paying for an auto loan on top of other financial obligations. Getting a part-time job that pays well is one way to meet this requirement. You can consider tutoring, participating in research studies, babysitting, or working as a barista.

Save for a Down Payment

The bigger your down payment, the smaller the amount you need to borrow. You also get more affordable monthly payments. On top of securing a part-time job, you can also consider selling some of your assets to help increase your initial deposit.

Get a Cosigner

Another way to increase your chances of approval is by getting a cosigner. This individual will take over the responsibility of paying the loan in case you’re not able to do so. This person doesn’t have to be a relative as long as they meet the requirements set by the financial institution. Some of these include:

  • An excellent credit score (around 700 or more)
  • A stable source of income
  • Proof that the cosigner can pay (e.g., recent tax returns)

Be One Step Closer to Your Dream Car

At Community 1st Credit Union, we offer financing options for young adults looking to purchase their first car. Through our First-Time Auto Buyer Program, members can secure auto loans in Iowa at low rates and manageable payment terms. If you have questions and concerns regarding our services, feel free to reach out to us anytime. Our financial advisor will be in touch with you shortly.