Auto loan in med school?
Started by kwooder
two friends of mine bought cars.
New words: Private loans 🙁 At least you don't have ot make a payment till you graduate!
New words: Private loans 🙁 At least you don't have ot make a payment till you graduate!
are you thinking about financing a new car on your loans?
i think it's a horrible financial decision, but i guess it's possible.
if you desperately need a car...i'd go with a used one...an old beater, but definitely something reliable...one of those old big buicks. come up with a cool name for it. Belinda or something like that. you just need something that will get you through medical school until you have some sort of income.
i think it's a horrible financial decision, but i guess it's possible.
if you desperately need a car...i'd go with a used one...an old beater, but definitely something reliable...one of those old big buicks. come up with a cool name for it. Belinda or something like that. you just need something that will get you through medical school until you have some sort of income.
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It also depends on how expensive your school is. OSU's tuition is relatively cheap (instate) compared to comparative schools. Most of OSU students are instate (75% almost I believe). Its doable and if you need a car, you need a car.2tall said:
As for co-signers, parents are always the best option. If your spouse has income you can possibly apply with them using their income. Or you could just take out more living expenses in order to cover the cost of the car payment (if you haven't reached the max).
I don't think it's a wise decision obligate yourself to make payments when you have no income or a "negative income" (medical school debt). That is an unnecessary, added stress. Many things that are doable aren't financially sound and don't make sense.mshheaddoc said:
As for co-signing...why do people need a co-signer? Because they're deemed unable to finance an item or because they have a bad credit history. If you don't make payments or pay late, it hurts your co-signer's credit. You don't want that type of resentment between non-spouse family and friends.
Needing a car and needing a $300/month note for 60 months are two different things. And...let's not forget about insurance rates on new cars.
2tall said:
The reason for trading vehicles is family travel. We're planning on having our second child next year and the ten year old jeep cherokee is not going to be able to get us all back and forth (we have a dog too). The grandparents live about two hours away and my wife will be spending some time there this next year and when I start rotations.
We have really good credit, I just didn't know if there was a no documentation type loan like with home financing.
There really is no hope of coming out of med school in good financial shape with a family and stay at home mother, but it's worth it to me.
First off, getting a loan isn't just on your credit. you can have excellent credit score and be denied on income (which he would be) and also on "lack of credit" meaning that you don't have enough established and paid accounts.
Also, it sounds like you are against co-signing from experience. My parents had to co-sign my first car loan after college due to "lack of credit" as I just had student loans and 2 small credit cards. I kept that open for a few months then refinances with a better institution 'on my own' as I was able to finally have some established credit. I didn't do it because my parents didnt want to cosign, I did it for a better interest rate and less hassle of them to document the income. Each institution sets its own credit guidelines on what type of risks they want to set. Credit is alot more than some people think. As for co-signers, everyone needs them to establish credit and usually parents are often cosigners for undergrad loans for many of my friends. Not everyone is irresponsible. I wouldn't cosign for someone whom I didn't think were responsible enough to maintain their credit. Just a few thoughts about cosigners.
Well then I wonder how people afford to buy things in medical school! I understand where you are coming from but when your car dies in med school and you have to drive to rotations 2 hours away, sometimes you need to get a "newer" vehicle. Not all of us have mommy and daddy or have a spouse that can support us. Using private loans (in which don't need to be paid till residency and beyond) is a necessary obligation when you are trying to get by. yes its bad financial management but life is money 🙁2tall said:
Kwooder - get a nelnet application when you decide on how much you need (I know someone who got the funds for a car through your financial aid office). Also talk to financial aid office. There are no "no income" loans. I wish there was another way to help you out. Good luck and congrats on the second child!
mshheaddoc said:
I addressed lack of income in my second reply.
I expressed my view on co-signing only to address your second reply.
mshheaddoc said:
My views on co-signing are not based on personal experience. In fact, when I financed my first car in college, my mom co-signed for me. As I have come to learn more about personal finance, the myth of building credit, and consumer debt...I realize that it was a horrible mistake for my parents to help me build a credit history. I disagree with that philosophy. It's based on lack of knowledge and poor decision-making. I want to build wealth. I want to be debt free. I will build wealth. I will be debt free.
I have a friend who's a bankruptcy attorney. I have a friend who deals in auto financing. I know the horror stories. But beyond that...this a man with a young family. Adding car payments is adding additional stress. I won't even begin a tirade on new cars. All I'll say is that cars depreciate...Typically 40% in the first two years. 😱
mshheaddoc said:
I did not suggest that he should not purchase a vehicle. I gave options that are less financially disastrous than financing a brand new vehicle. He needs a reliable vehicle. He doesn't need a 2006 Nissan Maxima. There are other options out there. He has just indicated that currently there is no income available to support his wife and kid.
You're right...everyone doesn't have outside support. That's why it's important that we educate ourselves on sensible personal financial management. Why on earth would anyone want to deal with a car loan 7 years later? What do you think the value of the car would be then? What do you think the total cost of that vehicle would be?mshheaddoc said:
You concede that it's bad financial planning and I agree. However, life is not money. A lot of people are living paycheck to paycheck (physicians included). That doesn't seem like much of a life to me. I don't want anyone to be in the position where they have to work. That takes the joy out of what you do. I want people to have control over their lives.mshheaddoc said:
Sure I could've said...Go out and do it. Of course, it's possible. There's finance companies/banks that will gladly hand you a financial noose, but I feel that would be irresponsible of me. I'd prefer to give advice based on what I'd do.
kwooder, you have an income problem. A stay-at-home mom is the most challenging and rewarding job anyone could have. There is a light at the end of the tunnel. If you're going to purchase a car...get the most reliable thing you can get for the cheapest you can get it.
There's always a contrary opinion.
Here is an example in use. Go to your local bank with your student loan approval documents. Set up a car loan with two yearly payments, one in Sept., one in Feb. Set the term to to be four years, this places your last payment in Feb. of M4. Try and find a one year old car that has already taken the first year depreciation hit. What you end up with is a nice low mileage, reliable vehicle for your residency while experiencing no car payments. Pretty nice deal and banks go for it.
