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Can you use your student loan to buy a car?
I just got a large refund from my student loans and I need a car. Can you use student loan funds to buy or lease a car?
Matthew Macgugan · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Cars are great to have for commutes to and from your college campus. However, you should think twice before using your student loan money to buy a car because it can end up costing you more than a traditional car loan.
Subsidized and unsubsidized student loans often come with higher interest rates than a typical
car loan
, meaning you will end up paying more in interest charges on your loan than necessary. Depending on your credit, this might not always be the case. Most car loans last six or seven years at most, while student loans can last as long as 10-20 years depending on the loan repayment plan you chose. You risk paying for a car for ten years that you might only drive for five.
You are better off looking into a standard car loan and using your student loans for education-related expenses. If you need help getting a car loan, you can try:
- If you’re worried about your credit score or income, you can find acosignerto help you qualify for a car loan.
- While it may be hard to save as a college student, having a largerdownpaymentwill also help you qualify for a better car loan.
However you decide to buy a car, you’re going to need car insurance. To find the lowest rates, download the number-one-rated car insurance app,
Jerry
. Just answer a handful of questions that will take you roughly 45 seconds to complete and you’ll immediately get car insurance quotes for coverage similar to your current plan. Jerry customers save an average of $879 a year!Good luck!
View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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