Do I qualify for a car loan?

I just got into a master's program. I started school with my dad's old beat-up truck, but it's getting expensive to repair. I need something more reliable. My credit score is only 600, and with student loans, I can't afford much in monthly payments. Will I even be able to get a car loan?

Answer
Congratulations on getting into your master’s program! I’m sorry to hear about your dad’s truck, but I’m sure it was nice while it lasted.
The good news is you should qualify for a car loan—and you have some options:
Trading in your truck: Letting go of a beloved car full of memories can be difficult. But the car dealership is likely to give you something for the vehicle, and this will knock down the sticker price of the new car. If you have some savings you can use for a down payment on top of your trade in, this will up your odds of qualifying for a loan as you’ll need to borrow less.
Shopping around: You should shop around for both the car you want and lenders to find the best deals.
  • Figure out the car that you want, down to the VIN number if possible. That way, you can subtract your trade in and down payment from the sticker price to determine the loan amount you’ll require—and whether or not you’ll be able to afford the monthly payments.
  • Some lenders specialize in students like yourself and people with thin credit reports. Check with your local credit unions, banks, online lenders, and dealerships.
Getting a cosigner: If you can’t qualify for a loan on your own, consider enlisting the help of a cosigner. Anyone with a good credit score of 660 or more who’s willing to cosign can help you get approved and earn a better interest rate. This will create more breathing room on those monthly payments.
If you are unhappy with your initial loan, don’t worry. You can still purchase a vehicle now, then refinance into a lower-interest loan after making several on-time payments and improving your credit score.
Refinance quickly and easily through the Jerry app. On average, those who refinance pay $85 less every month.
Lauren Smith
Answered on Nov 19, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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