How do your typical school loans work?

[Houndstooth713]

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Hello,

I have had the incredible privelege to have my college tuition paid for by my parents. I have worked every second I have since I was 14 and I pay for everything besides my tuition. I have never applied for a large loan for school or a car. I am in need of a new car (the old one is about to die) and I have a year left before pharmacy school to make payments. I will most likely still have payments going into pharmacy school for this new car. I understand that I will be paying a debt with a debt but it will buy me time and not get my car reposessed. If I apply for a school loan and accept the full amount my school allows me, can I use some of that money to continue to make payments on my car or is the school loan strictly for school only. I ask because I wonder how half the interns coming out of professional schools pay for cost of living and tuition and car payments while in school making no income. Is this a reasonable plan: to buy car, make as many payments as I can to lower the debt before school, and use some of the money for school loans to continue to pay the monthly car payments? Any advice in this area would be greatly appreciated!

🙂

 

[xtsukiyox]

Hi Houndstooth. I have not been too involved in student loans myself to this point (by luck alone, I assure you), but I have some friends who have needed loans to not only pay for tuition & books, but also living expenses (room & board), etc. I think it depends on the loan. Some loans can be used for living expenses - and, realistically, who is going to track where you spend "living expense" money anyway? Also, wouldn't a car payment be considered a "living expense?"

Alternately: What about saving as much money as you can and buying a used car from a private party? Can you get a small loan for this purpose (something you can pay off before Pharm school) from the Bank of Mum & Dad?

 

[FunnyHunny]

Friends of mine in undergrad never stuck to just "school expenses" when it came to their student loans. They payed for everything with that money. Brand new cars, apartments, TVs, computers....one kid even bought a boat. People definitely went crazy - it's like giving a 16 year old kid a credit card.

I am in a similar position as you. I never had to take out student loans as an undergrad and I am driving a 1992 beater that has seen better days. I think your plan is reasonable. So long as you don't live beyond your means and waste your student loan money on useless items (like a boat) then you'll be fine.

 

[Houndstooth713]

Thanks to your both! Yea the bank of mom and dad is closed-haha. I am more than grateful that they enabled me to go through 4 years of college at Cornell University with no debt to my name. A person really couldn't ask for anything more than that. I considered buying a newer used car versus a new car and I haven't had the best luck with used cars - which is why I am in the position I am in - I bought my car rather cheap with cash, held up for 5 years but know now is the time to buy because it is a buyers market with the economy and if I plan on getting any money for trade in I ought to do it now. So back to new vs used: It is better to buy a new car with the warranty then to buy something I don't really want (and I'm not talking me being picky) and having a loan either way. I am going to try to get the payment down to as low as possible - wheel and deal! Haha, anyways thanks for your suggestions!

 

[FunnyHunny]

I'm debating between a new vs used car as well. Right now because of the economy, prices of used cars have gone up while prices of new cars have gone down. Also you'll be able to get a new car at a much lower interest rate than a used vehicle plus there is the government new car incentive. Do you have any family members that work for Chrysler or GM? If so, that's another couple grand deducted from MSRP. If you know someone working for GM, right now they have the PEP car deals (cars that have been driven by the higher ups with under 300 miles) which would allow you to get the new car deals but a few thousand off MSRP.

Just my opinion, but I think if you can afford a new car now is the time to get one.

 

[216168]

Friends of mine in undergrad never stuck to just "school expenses" when it came to their student loans. ....one kid even bought a boat.

I'm on a boat motherf***er!!

 

[Passion4Sci]

I'm on a boat motherf***er!!

This ain't Sea World, this is as real as it gets.

 

[trailrider400]

This ain't Sea World, this is as real as it gets.

I got my swim trunks and my FLIPPY FLOPPIES. I'm flipper burgers your at kinkos straight flipping copies.

Why do we seem to get off subject??? 🙄

 

[Passion4Sci]

I'm on a boat motherf***er!!

I got my swim trunks and my FLIPPY FLOPPIES. I'm flipper burgers your at kinkos straight flipping copies.

Why do we seem to get off subject??? 🙄

I have no idea, but did you know that I climb buoys?