Can I use federal loans to finance a used car or a lease?

[MediMan456]

Hi there! M0 here. I start med school in 8 months and I’m trying to figure out how I’ll get a reliable vehicle that will last 4+ years. Currently I only make about $1500 per month and after food, rent, gas, undergrad loans etc. I only have about $350 to save. How can I finance a car for med school? I’m afraid I won’t be able to save enough to buy a car with cash. Can I use my loans in med school? I know it’s not very wise. Let me know what you guys think!

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[Sephirakra]

Hi there! M0 here. I start med school in 8 months and I’m trying to figure out how I’ll get a reliable vehicle that will last 4+ years. Currently I only make about $1500 per month and after food, rent, gas, undergrad loans etc. I only have about $350 to save. How can I finance a car for med school? I’m afraid I won’t be able to save enough to buy a car with cash. Can I use my loans in med school? I know it’s not very wise. Let me know what you guys think!

Officially, student loans aren't supposed to be used for car payments. In practice, it happens all the time. Make sure to check out your school's cost-of-living allowance to determine how much you can allocate.

 

[IlDestriero]

Back in the good old days you could get a subsidized loan even if you didn’t need one. Interest paid by the .gov. $8500/yr then defer for another year during internship, then finally pay it off in full on the first payment. I think you could actually defer it another 3-6 months as well. It was a long time ago. There were many new cars in the med student lot. I was more modest.
The last of the real Spiders.

 

[esob]

The biggest thing is to qualify for whatever you want to finance while you still have an income stream because banks won't count your loans as income so if you are not working in med school you will not be able to qualify for anything. I have a lot of friends that are forced to throw money away on rent for 4 years instead of building equity because they waited until after they had quit their jobs to try to qualify for a mortgage.

 

[OnePunchBiopsy]

Financed a new car during 3rd year of med school. Cost of doing business.

The riskiest part was it had a manual transmission! Was always a dream of mine to learn stick.

 

[Tobirama]

Epic name

Financed a new car during 3rd year of med school. Cost of doing business.

The riskiest part was it had a manual transmission! Was always a dream of mine to learn stick.

 

[stickgirl390]

Once your tuition Is paid, any extra loan money will be returned to you by the school, usually direct deposit or a check. From that point, money is money.

 

[Cornfed101]

Just save as much as you can and finance an ugly car that is mechanically sound before you leave your job. You can get a car like this for $5k or less.