Buying a car with student loans
Federal student loans can absolutely not be used for anything outside of education expenses, but some private student loans can be used for other purchases, such as a vehicle. However, even if you have a private student loan, it is not advisable to use it to buy a car.
What can I buy with FAFSA money?
Federal student aid from ED covers such expenses as tuition and fees, room and board, books and supplies, and transportation. Aid can also help pay for other related expenses, such as a computer and dependent care.
Should I buy a car before filling out FAFSA?
Another way to shift the asset load is to accelerate necessary expenses. For example, if your family needs a new car or the house needs a new roof or other major repairs, it may be better to spend the money on these necessary expenses before filing the FAFSA or CSS/Financial Aid PROFILE.
How can a college student afford a car?
How to Afford a Car in College
- Buy a Used Car. The latest vehicles on the market may have advanced tech and features, but if you’re a college student looking to save, it’s best to buy used.
- Start Saving Early.
- Boost Your Credit Score.
- Secure a Steady Income.
- Get a Cosigner.
- Shop at a Dealership.
Can you finance a car with student loans? – Related Questions
Should a college student finance a car?
Most lenders have restrictions on how you can use their loans. But while student loans are meant to be used for educational purposes — which can include transportation expenses — they don’t always include stipulations about buying cars. With that said, it’s not a good idea to use a student loan to purchase a car.
What is the best way for a student to buy a car?
One of the best ways to get approved for a car loan as a student is to have a co-signer. A co-signer can be a parent, relative, or another adult with established good credit who agrees to apply for the loan with you.
How much should a college student spend on car?
As a rule, your total cost to ride (car payment, insurance, fuel, maintenance, repairs, taxes, and other fees) should be less than 20% of your income.
Can students afford a car?
You can get car financing even if you’re still a student. It may just be a bit more challenging because of your limited credit history but it’s definitely not impossible.
How am I supposed to afford a car?
How to Determine If You Can Afford a Car
- If you’re thinking, how much of my income can I spend on the car, remember the 20% rule.
- However, everyone’s budget is different based on the expenses that you have.
- A budget between 10% and 50% of your annual income is what you could reasonably expect to spend on a car.
Should I have a car in college?
Having a car may add an extra element of stress for students navigating college life in an unfamiliar city. It’s worth checking ahead of time to find out if the university offers parking permits to undergraduates. If parking on campus isn’t an option, look for secure and inexpensive long-term parking off-campus.
What percent of college students own a car?
According a U.S. News survey, about half of college students have cars on campus. Depending on the school, up to 98% of students have vehicles on campus. But do college students need them?
How do you get around college without a car?
Alternatives to Having a Car on Campus
- Bum a Ride With a Friend. This is useful if you want to go out to the movies or grocery shopping.
- Check With Campus or Public Transit.
- Bring Your Bike.
- Longboard or Skateboard Around.
- Mopeds.
- Coordinate With Your Parents.
- Skates and Scooters.
Why is a car necessary for college students?
Having a car helps you get around without spending the time waiting for a bus or walking where you need to go, especially in inclement weather. And, if you go to a school in a smaller town, taxis or rideshares may be unreliable and not necessarily available where and when you need them.
Is it smart to bring a car to college?
Bringing a car to college isn’t as simple as purchasing a parking pass. There are other costs to consider, some less evident than others.
Total cost.
| Expense |
Cost at school |
Cost after four years |
| Total: |
*$1,125 |
*$6,300 |
| Parking |
$80 |
$640 |
Should I bring a car to college freshman year?
If you’re a freshman driving, having a car could help you make friends, but ask yourself if you want to be the driver each time you go off campus in a group. You might rather be the one asking for occasional rides. But a car can do worse things than cramp your style—it can put you in an unsafe situation.