How much will I pay per month on a car if I'm a college student and my mom cosigns on the loan?

I want a $5,000 used car. I can put $2,000 down, and I want to finance the remaining $3,000. I make $1,000 a month with no expenses other than spending money. My mom will cosign for the loan because I have little credit history. How much should I expect to pay?

Answer
“Depending on your mom’s credit, you can reasonably assume an APR of four percent to eight percent. So let’s take six percent as a midway point.
Here’s how much you’ll pay:
  • 36 months: $91 per month with $286 in total interest ($3,286)
  • 24 months: $133 per month with $191 in total interest ($3,191)
  • 12 months: $258 per month with $98 in total interest ($3,098)
Keep in mind that the more you lower your loan term, the lower the rate will go, so this is just a ballpark example.
Also, note that you must maintain full-coverage car insurance on any vehicle you finance.
Since you’re most likely under 25, this could cost several hundred dollars a month and probably more than the car note itself. It’s just something to think about before you sign on the dotted line.”
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Eric Schad
Answered on May 05, 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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