Is it even possible to get a car loan for international students? YES! It is possible. Having a car is a necessity for many people. A car is not just an appliance that provides transportation but also becomes one’s friend.
If you’re staying away from your home, having a car can be pretty helpful. Transportation costs in certain countries like the U.S., UK, or Canada can be expensive. If you are thinking about cabs, they are not a good option. The cost is pretty high, and they are not reliable either.
But on the other hand, cars are not cheap! So what’s the solution? How do you own a vehicle as an international student? The answer would be a car loan for international students. In this article, we will discuss how to get a car loan if you are an international student. So make sure to read the entire article!
Why do you need an auto loan as an international student?
There are many reasons for this. If you live away from your hometown, owning a car can be very important. You want to have the independence of traveling whenever and wherever you want.
There are several benefits of owning a car, but transportation cost is one of the most important. You can always go where you want to because owning a car means that you’re not bound by the timetables of public transportation. Not only does it save time, but it saves money too!
Also, countries like Canada or UK are pretty expensive when it comes to transportation costs. Taxis are overpriced, and buses are crowded. So, this leaves you with the only option of owning a car.
What are the requirements for an international student car loan?
Getting approved for an international student car loan is complex compared to a local student loan. You will be driving in a different country, and you need to obey every rule and regulation. There are thee things that you need to begin with:
1. Drivers license:
Whether it’s an international license or a local one, you need to have some proof of having the ability to drive. If you don’t have a license, you can apply for one, but take driving lessons first. Driving lessons are compulsory in many countries like Canada, U.S., or UK. Suppose you’re an international student wanting to get a U.S. driver’s license. In that case, the Student Exchange Visitor Program (SEVP) has a detailed fact sheet and various resources to assist you in doing so.
2. Auto insurance:
In the U.S., it is required for every car driver to have auto insurance. Most other countries may not be as strict, but having insurance is always a good option. An international student car loan can have several benefits if covered with insurance. A typical bank loan doesn’t cover the entire cost of the vehicle, so it’s better to get some coverage just in case something happens.
3. An auto loan:
This is the most crucial part. Without a loan, you will not be able to get your hands on your car. So, the next thing you should do is apply for an international student car loan. Several companies offer loans to international students, and they have their own list of requirements and restrictions as well.
Documentation for applying for an Auto Loan as an international student
You may be wondering what sort of documentation you need for this. If you are living in the U.S., there are several things that you can use as your documentation when applying for a car loan.
1. VISA: This is the most common and accepted form for international students. If you’re a U.S. visa holder, you can use it as your primary identification document while applying for an auto loan. Make sure to bring your passport and other personal information with you.
2. Finance qualification form: This is an essential document you need to have. The finance qualification form has some basic information about your employment and financial situation.
3. Payment documents: These documents are the most important ones. These will show your monthly costs for tuition, rent, bank statements, utilities, etc. So make sure to have them ready.
4. Proof of lawful residence: This is unnecessary for you if you’re a U.S. visa holder. However, if you’re living in the country on some temporary status, you’ll need to prove your lawful residence.
5. Employment letter (if applicable): If you’re working, make sure to have a letter from your employer. The letter should state the monthly salary and the year-long employment period.
How to apply for an international auto student loan?
Once you have the required documentation ready, you can apply for a car loan. You need to follow several steps to apply for a car loan.
1. Research for car loan companies: Since you are an international student, you have to be careful while choosing the company. Once you have found a few companies, make sure to research them to see which one has better interest rates and fewer restrictions.
2. Compare rates: Compare the cost of auto loans for international students before finalizing your choice. You’ll be surprised by how much different companies offer in terms of monthly payments and interest rates.
3. Apply: Once you have chosen the company, fill out the application form as honestly as possible. The process may take some time, but once it’s done, your loan will be approved, and you can get your car. If you are not aware of some terms, get help from a professional. Don’t sign for anything until you understand the loan terms.
4. Wait for approval: Now that you have applied for a car loan, it’s time to wait for the company to process your application. This may take some while, so relax and don’t worry about anything else until they approve your application.
5. Get auto insurance: This is important for your car, and it’s mandatory as well (in some countries). Make sure to get auto insurance to drive safely on the road.
6. Start making repayment: Now that you are all done and received your desired loan amount, it’s time for you to create a plan and budget to start your monthly payment. This is also another important step, so take it seriously and don’t skip this.
Do I need a cosigner?
It depends on the lender. Most car lenders require a cosigner if you are not a U.S. citizen. However, some companies have special programs for international students to get approved without any cosigner. If you don’t like the idea of getting a cosigner, then contact these companies and ask if they have an alternative solution for your situation. Also, when it comes to a cosigner, they must be a permanent resident of the country or have been living for two years with a stable job and regular income in the country.
Which is better, an auto loan or a personal loan?
In the case of international students, it’s better to get an auto loan rather than personal loans or student loans. Personal loans have a lot of strict repayment terms, and you’ll understand them only after reading the contract. Also, many companies don’t provide personal loans for international students, so you won’t have a lot of options to choose from. In addition, car loans are tailored to getting a car, so you’ll get a lower interest rate and better payment plans.
Do I need a credit history?
Again, it depends from company to company. Some finance companies might check your or your cosigner’s credit score, while others don’t. There isn’t any universal credit check policy, so you need to ask customer support about it before applying. But if you are signing a cosigner, there is a high chance that they will check their credit history.
If you are an international student and want to buy a car, you need to apply for a car loan. Make sure to check the terms and conditions before signing for anything, and don’t be afraid to negotiate if required. The best idea would be to talk to someone experienced in this, so make sure to ask friends or relatives for help. Good luck!