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Stuck with a car loan!!!

Discussion in 'Finance and Investment' started by rayden001, Apr 17, 2007.

  1. rayden001

    rayden001 5+ Year Member

    Feb 19, 2007
    Please I need some helpful advice. I made a terrible mistake during my second year in undergrad and took out an auto loan of $12,000 with a 72 month term. I am currently a senior and I have made almost two years in payments with about 4 more years to go. My intention after college is to enroll in a masters of medical science prior to medical school. Based on my situation, I have the following questions:
    1. Would I have time to work while pursuing an MMS degree to pay off my loans?
    2. Is there a way I can apply loan deferment towards my auto loan?
    You might suggest that I just get a job after college, but I would be even in more problems because I have to start paying my school loans. I am solely responsible for my finances as I come from a lower class family. So please advice me accordingly. Your responses are highly appreciated.
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  3. lsumedgirl

    lsumedgirl Livin' the dream! 2+ Year Member

    May 13, 2006
    Well, I'm not sure how it works in masters programs, but I know that people do manage to make it through med school while paying car notes. (I'm about to become one of those people.) Obviously, it's better to have less debt while in school, but it can be done. I'm just going to make the car payment out of the cost of living portion of the loan. (Again, I'm not sure how this works for a masters... if it's similar.) But I do know that you won't be able to defer those payments. Sorry.
  4. pattyk

    pattyk 2+ Year Member

    Jan 16, 2007
    Kansas City, KS
    I also have a car payment and am trying to decide how to handle it. I could sell my car and use the money to pay off the note, buy a clunker, and still have money left over. Or, I could keep the car and starve. They don't budget for a car payment for cost of living which really stinks b/c I cannot imagine working during school to make up the difference.
  5. cheezer

    cheezer Guest

    Roll your car debt into your school loans. Then defer...and defer...until you've got a job.
  6. OneOfShempsKids

    OneOfShempsKids Junior Member 2+ Year Member

    Aug 15, 2006
    How much do you still owe on the car? You can take the car to a dealership and have them buy the car from you, and if the car is still worth anything, you can buy out the rest of the loan with the money, and if theres anything left over, you can keep it. Dealerships might low ball you a bit, and you'll be stuck without a car, but if you really want to get rid of these payments, than I guess you can do that.
  7. Sartre79

    Sartre79 10+ Year Member

    Mar 29, 2003
    Have you looked into refinancing the loan? I'm not sure how long you have had it, what the payments are, or the term left on the loan...but if the problem is the amount of the payment you may be able to refinance and stretch it out. However, you will pay more in interest and therefore pay more overall for a car that may be worthless (or close to) when you're done paying it off. You could sell it and pay back the loan...but I'm not sure what your needs for transportation are...or whether you are "upside down" on the loan. can also claim forbearance on your school loans for reasons of economic hardship. So, at least you may be able to put those off for awhile. You cannot defer payment on a private auto loan to my knowledge.
  8. droberge

    droberge Admission or Bust 2+ Year Member

    Jul 27, 2006
    I could imagine that being a tough situation. I took a car loan out before I was in college... I finally paid off the car in my senoir year of college but I sucked and I had to work through college to do it. I can't imagine doing it in a grad program not to mention medical school. If you can get some type of paid TA or research position as a grad student, that is what I would do to pay off the car. Often times these positions do not pay well enough to live off of. If it comes down to it... take out a subsidized student loan to pay off the car, that way your not paying interest (probably lower interest than on your car loan!!!) until your out of school and your do not have to worry about payments either.
  9. Sol Rosenberg

    Sol Rosenberg Long Live the New Flesh! 10+ Year Member

    Feb 11, 2006
    Living in America
    You can defer your loans (or get a forebearance) if you are a full-time student, I believe. So, if you pursue your MS degree, you can defer your student loans. Then, work in addition to going to school.

    Or, like someone else said, sell the car. That might be difficult because you don't have the real title. You'll have to work with your leinholder to figure out how to do that and see if they will even let you do it. They may have to repo to car.

    Welcome to the real world. Life's a bitch sometimes.
  10. Dr.McNinja

    Dr.McNinja Nobel War Prize Winner Moderator Physician Faculty 10+ Year Member

    Aug 2, 2006
    $12K on 72 months? You're paying less than $200 a month, unless you got hammered on the interest rate. Even still, that isn't a high amount. You could take out the maximum student loan and pay off the car, because you should only owe about $8500 after 2 years, or you could sell the car, but you would be horrendously upside down on the loan (unless you had a huge down payment). Either way, you can't defer your car note. You either pay it off or sell it. You can pay it off with another loan, but that isn't necessarily smart money management.
    You can easily sell it outright, and when you pay it off, mail the title to the new owner. Happens all the time. DO NOT LET IT GET REPOSSESSED, because the bank just doesn't come and get it, they come get it, sell it, and then force you to make up the difference from what it is worth to them vs what they got for it at auction. Plus, you still need a car.
    Earning $200 a month is a weekend of waiting tables. If you don't have that much time, then you study WAY too much.
  11. searun

    searun 5+ Year Member

    Jul 31, 2006
    You are what the good folks in the car business call "upside down." In other words, you owe alot more on your car than what it is really worth as a cash sale on the open market. This is because you really made a stupid mistake - a six year are just paying interest primarily while your car is depreciating faster than you are reducing principle. Never, ever, do a 72 month loan again. If you can't afford the payments on a 36 month loan, then you cannot afford the car. By the way, I drive a car that is 22 years old (1985 vintage). I paid $900 for it three years ago and it runs great. Drive what you can afford.
  12. ilovelucy

    ilovelucy This is Lucy. 2+ Year Member

    Mar 12, 2007
    Chicago, IL
    I was in the exact same situation as you a year ago, and I am now completing my post-bacc and applying to med school. It can be done.

    First, you CAN DEFER your student loans. In fact, if they are consolidated or not, they don't have a choice but to defer your loans -- that is the law if you are in school. If you don't go to school right away you can submit for a forebearance, but I woudl avoid this if possible.

    Of course, it is wise to check that they (your loan holders) get the information from clearing houses that you are back in school (my Perkins loan got the info too late), but other than that, as long as you are in school, you will be ok.

    As for the car -- it really depends on how much it is now worth. Mine was acutally worth less than the loan so there was no chance of selling it. :( I come from a very low income family, but I do work. I wrote a letter to the financial aid office at my post-bacc school requesting more loan money proving I couldn't compensate for the car payments, but could not sell it because I coudn't pay off the rest left on the loan. They were very understanding and added an additional $250 dollars a month to the amount I was allowed to take out in loans. I know this sucks -- but the interest is a lot less than credit card interest, and I was able to continue my schooling.

    Also, consolidate your loans ASAP (after june 1 when the new rates come out). Do not listen to the consolidation companies that will tell you to use your 6 month grace period first. You will need that between the masters program and med school! Consolidation payments are generally low and you'll only have a couple of months of them before you enter a masters program.

    Good luck and I hope this helped.
  13. Bernie3144

    Bernie3144 7+ Year Member

    Jul 22, 2006
    If you're talking about the MMS degree at Drexel, I would highly discourage trying to work your first year.. especially if you're trying to do really well. It will be impossible to do well enough in the program and work as much as you need to without taking out loans. Take out a grad plus loan and live someplace cheap. If you go with EAS you are able to consolidate your federal loans and grad plus loan after you graduate from MMS :thumbup:
  14. Haemulon

    Haemulon Slippery When Wet Moderator Emeritus 7+ Year Member

    Jun 1, 2006
    On SDN
    Ok, perhaps any significant amount of time working may be a heavy load. But then again, we are only talking about $200.00 a month here. Even at minimum wage (what is it now, still $5.75??), we are only talking about 10 hours per week. Surely anyone can work 10 hours a week and still go to school. I am just saying that it's an option, that's all.

    Another option would be to sell the car and buy something cheap just to get around. If money is really an issue, there is no reason that you can't just drive a 2-3k car instead of a 12+k car. Depends on your priorities. You would probably get close to enough, or at least a good chunk of this, left over from selling and paying off your current car. The rest can easily be paid for with your living expense allotment from your student loans
  15. mshheaddoc

    mshheaddoc Howdy Moderator Emeritus 10+ Year Member

    Apr 24, 2002
    Wild west of Mistytown
    1) You can't defer auto loans
    2) Go to kelly's blue book or a site like it and see how much your car is worth compared to your loan. My guess is you are in the hole if you stretched it out 6 yrs and already bought it used and will not make back enough by selling it to a dealer or the likes to pay off your debt.

    There are budgets in programs and if you are smart you can get buy with the car pmt but if you are living in a city it might be more expensive to keep the car (parking fees!) than to sell it. You might try to sell it to someone you know if you can to minimize expenses.

    If selling isn't an option, then yes you will have time to work if you make the time. There are 24 hrs in a day and 7 days in a week. Most don't study for all that time as someone else said you could work 10 hrs a week somewhere.


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