Are Student Car Loans Really Needed?
Why do students need cars? Well, actually, not all college or university students need cars – but many may want one to prove they are that independent, to get around town with, to carpool with their friends with to work or school with, or simply to have around when situations crop up that may need the use of a car. For college or university students, there are now lenders who offer student car loans as well.
Nowadays though, student car loans are not that easy to get anymore because lenders have learned their lesson. Many college or university students have proven to be unreliable borrowers so that it is not profitable for lenders to lend to such people. If you are a student who is trying to get student car loans from the credit unions or banks (the traditional lenders), then you may find it hard to get your preferred student car loans from these institutions because they tend to practice conservative lending practices. Students do not fit the stereotype of an ideal borrower because most of them lack any stable income while they are students, or even have maintained a line of credit long enough to be considered good borrowers. Those who racked up huge credit card debts in the past are considered bad borrowers (and thus get stuck with poor credit or bad credit auto loans instead.)
As far as student car loans are concerned, the main worry any student borrower has to contend with is: who will be paying for the loan? Often, student car loans are paid for by the parents which is good for the lender who makes his profit, but not so good for teaching the student borrower on how to be financially responsible. One good compromise is for parents and the student borrower to share responsibility for making payments. This allows the student to learn how to manage his income while enjoying the perks of having his own car.