How do I buy a car using my student loans?

I want to buy a car using my student loans, as I'm thinking of putting off school for another year. Can I do this?

Answer
Although there’s no oversight of what you do with student loans once the funds hit your bank account, using them to buy a car is a poor idea.
If you use your student loan to purchase a car rather than go to school, your finances will be in worse shape overall due to:
  • Your vehicle’s depreciation (it decreases in monetary value each year)
  • A higher interest rate than a standard car loan, in most cases
  • A long loan term (you’ll still be making payments long after you’re ready to sell the car)
In summary, buying a car with student loans creates far more problems than it solves. If you need a car, consider saving up to buy a used car.
Whether you buy a new car with a car loan or purchase a used vehicle with cash, you’ll need car insurance before you can get behind the wheel.
That’s where Jerry comes in. Just complete a quick 45-second sign-up, and you’ll be able to compare competitive quotes from top providers like Nationwide, GEICO, and State Farm.
Eric Schad
Answered on Nov 15, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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