How a car loan would play into your expenses: Lenders will assess if you’re in rent stress’ i
If you’re a student or young person looking to get something a bit more than a $3,000 20 year old deathtrap, car financing could be a tempting option. However, a car loan on a new car can be a big burden to carry, especially when you’re young and not earning much. There’s a few considerations to make before diving in head-first.
Your income
Chances are your income is rather limited if you’re in high school or at uni. Unfortunately, the 20 hours a week stacking shelves at Woolies might not cut it when a lender looks at your application. Of course, this depends on the amount you’re asking to borrow, but most lenders look for several key things:
A steady, full-time or full-time equivalent wage: Lenders will often look for steady employment for over a year, as well as assess your income.
A track record of paying off debt and other expenses: Lenders will look into your credit report, which if you’re a student, is probably a pretty short one. (more…)