Can I get approved for a car loan if I have $60,000 in student debt?
"I just graduated from college. I already have a job offer for $52,000 a year.
But I'm still worried about how much student debt I have ($60,000). Can I get approved for a car loan with that much debt?"
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Answered on Jun 03, 2021
“If your credit score is good, the next thing the lender will look at is your debt-to-income ratio on a monthly basis.
This compares how much you make a month (in this case, $4,333) to your monthly debt payments.
Let’s say you have to pay $500 a month toward student loans and your car loan is $500 a month. Add in rent for about $1,000, and you’re at $2,000.
To get approved, you usually have to have a debt-to-income ratio of 43% or less. In this case, your rate would be 46%, which means you probably wouldn’t qualify.
Add in the cost of full-coverage car insurance and you’re looking at another couple hundred.
The best thing you can do is save money and pay cash for a cheap car. In the meantime, pay down your student debt. In a few years, you can treat yourself to a nicer car that’s within your budget.”
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