Buying a car with loan?

[adamMD]

This might be a dumb question, but my car is breaking down on me and I'm 15K in debt already. Does anyone know if the loans we get in med school would be enough to finance a car?

Also, seeing that I'll probably make good $ as a doctor I'm hoping to be able to get a new mustang or something like that. Is this simply ludicrous? I feel I would be rewarding myself for getting into med school. Future Adam, that rich bastard, can surely afford the bill.

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[jamilla_w]

This might be a dumb question, but my car is breaking down on me and I'm 15K in debt already. Does anyone know if the loans we get in med school would be enough to finance a car?

Also, seeing that I'll probably make good $ as a doctor I'm hoping to be able to get a new mustang or something like that. Is this simply ludicrous? I feel I would be rewarding myself for getting into med school. Future Adam, that rich bastard, can surely afford the bill.

If you plan on living in a cardboard box and/or buying another sh*tty car.

 

[chemphd]

From what I understand, you'd have to take out a personal loan- Stafford loans can't be used to pay for cars (and some other types of expenses).

 

[Abilene85]

No. From what I understand, schools consider you to be starting debt-free, which means pay off your car and pay off you credit cards. I suppose you can live in cheap housing with 3 roommates with no internet and no cable TV, eating pasta nightly and put that money toward a car payment, but it doesn't sound fun.

My school has a 1 time emergency loan, to help people in a bind. They will loan you an extra bit of money if, for example, your laptop spontaneously combusts. I don't know if they would allow you to take out that money for a car payment if your car broke, but it wouldn't hurt to ask if schools you are applying to offer anything like this.

 

[TheRealMD]

So they all just happen to have cars already? That sucks.

 

[mints of b]

Future Adam, that rich bastard, can surely afford the bill.

That's awesome.

 

[alwaysaangel]

This might be a dumb question, but my car is breaking down on me and I'm 15K in debt already. Does anyone know if the loans we get in med school would be enough to finance a car?

Also, seeing that I'll probably make good $ as a doctor I'm hoping to be able to get a new mustang or something like that. Is this simply ludicrous? I feel I would be rewarding myself for getting into med school. Future Adam, that rich bastard, can surely afford the bill.

No, you'd be extremely hard pressed to afford a car like that.

And technically its not allowed to use medical school loans to pay for a car. You can actually pay for maintenance for a car you currently have (have to show receipts) and get an additional emergency loan for something like that. But you may not get additional money to buy a car.

So like others have said - if you really wanted to live like a monk with a nice car then yeah you could probably do it. But it wouldn't be pleasant and you better not get caught.

You could probably manage a cheap used car (<5k) and not break yourself - but anything beyond that is a really bad idea.

As an example:

By the end of this year I will be 45,000 in debt. I also received 5,000 in grants.

So of that $50,000 I was "given" - 25,000 is going toward tuition/health insurance, etc.

The other 25,000 is for me. To live an entire 12 months (technically its for my 10 month school year but since I don't disappear during the summer and can't guarantee a paid internship I need to extend it until September of next year.

It gives me about 1900/month to live off of plus 2000 for books for the year. (However, this is a LARGE amount to live off of. I don't think all schools give you this much - Irvine is a very expensive area to live in - my rent alone eats up almost 1000 of that)

Additionally, I wasn't given the full amount up front - its split into my quarters so I got 14k first, then I get about 5 more in January and March.

I guess if you could get a car place to give you the loan you could probably pull of car payments, but with 15k of debt already and no employment - I'm thinking you'd get turned out. And it wouldn't be worth the extra debt and interest even if they didn't turn you down.

Save yourself the hassle and buy an old car now. They really aren't kidding with they say live like a student now and a doctor later. Otherwise you really will be living like a doctor now and a student later.

 

[jbrice1639]

From what I understand, you'd have to take out a personal loan- Stafford loans can't be used to pay for cars (and some other types of expenses).

stafford loans can not be used to pay for a car, as you mention, but the amount that can be borrowed as stafford loans isn't even enough to cover tuition anywhere except the lowest cost state schools - so the OP will already be into outside lenders to cover the rest of tuition plus cost of living. you can apply for an increase in your cost of living allowance with your school's financial aid office for a reasonable car payment. it is in their power to accept or deny this. considering that a mustang, even top of the line, is a relatively inexpensive car, the payment would most likely be low enough not to raise any eyebrows - especially if the OP takes all his savings to make a large down payment to bring the remaining payments down and make his net worth less as far as his "financial need" is concerned.

if he tries to tell the financial aid office he needs a loan to pay off a shiny new audi S8, he'll be laughed out of the office, but a car in the mid $20,000s wouldn't be out of line.

 

[plauto]

stafford loans can not be used to pay for a car, as you mention, but the amount that can be borrowed as stafford loans isn't even enough to cover tuition anywhere except the lowest cost state schools - so the OP will already be into outside lenders to cover the rest of tuition plus cost of living. you can apply for an increase in your cost of living allowance with your school's financial aid office for a reasonable car payment. it is in their power to accept or deny this. considering that a mustang, even top of the line, is a relatively inexpensive car, the payment would most likely be low enough not to raise any eyebrows - especially if the OP takes all his savings to make a large down payment to bring the remaining payments down and make his net worth less as far as his "financial need" is concerned.

if he tries to tell the financial aid office he needs a loan to pay off a shiny new audi S8, he'll be laughed out of the office, but a car in the mid $20,000s wouldn't be out of line.

Actually I am pretty sure Stafford (both subsidized and unsub.) goes up to around $40,000 a year. But it does not make sense to me to take out an 6 or 7% loan when you can get many decent cars brand new at 0% financing during promotion time. Just keep driving the POS

 

[Arsenic]

moved to the financial aid forum

 

[emeddo]

stafford loans can not be used to pay for a car, as you mention, but the amount that can be borrowed as stafford loans isn't even enough to cover tuition anywhere except the lowest cost state schools - so the OP will already be into outside lenders to cover the rest of tuition plus cost of living.

Hmmmm........

 

[Doctor Bagel]

Theoretically federal student loans aren't supposed to cover car payments, but lots of students manage to make car payments on their loans. They thing is that they give you a lump sum of money each semester/quarter, and it's up to you how to budget it. If you needed to make a car payment, you could probably find ways to carve out the money in your budget. So if you absolutely have to get a car, you can do it.

I would recommend skipping the mustang, though, and buying something like a used civic or corolla.

 

[Nataliemay24]

Any thoughts would be appreciated.

My thought on the matter:

 

[thRob]

seriously?

 

[Old Grunt]

Hey,

Just wanted to know if we can use a grad plus loan to buy a nice car for over 45 grand. If not can what loans can we use. Please let me know. Any thoughts would be appreciated.

Thanks

I don't know about the legalities of it, but as far as common sense goes, if I were to take out a loan to buy a car and had no source of income, it would be as economical as possible.

 

[IceMan0824]

Hey,

Just wanted to know if we can use a grad plus loan to buy a nice car for over 45 grand. If not can what loans can we use. Please let me know. Any thoughts would be appreciated.

Thanks

You could take out loans to get the car if it is granted to you.
Speaking from a financial standpoint, this would be equivalent to financial suicide. You take out a loan to buy a product which will depreciate faster than you can repay the loan, and you don't currently have a source of income that can sufficient pay back the loan for the next four years.

I've never advocated getting a loan to pay for a car, but getting a loan for a car when you're not working is outright irresponsible. You're adding a huge liability that you can't easily erase. A 45K liability (according to you) no less.
Unless you have parents that will pay the loans for you, get a cheaper car, or no car at all.

I don't know if you can use the Grad Plus Loan to pay for a car loan (I believe the loan is reserved for graduate education including tuition, room and board, supplies, lab expenses, and travel, less any other aid), but a private lender should have no problem offering a lesser car loan after appropriate credit checks.

 

[TheRealMD]

A car usually isn't covered in any financial packages schools give you. And I doubt you'll be getting a car costing $45k for a LONG time.

 

[Auron]

Who cares what you drive as a pre-med.....

 

[Dr_Dan_the_man]

somebody please close this read.
it is beyond ridiculous

 

[TexasTriathlete]

Typically, banks have something called an "Auto Loan", which can be used to purchase a car.

I am utilizing one of these right now, and it is working out nicely. I own a car, and I am allowed to make monthly payments on it, each of which is far less than the actual price of the car. It makes buying a car affordable, even for a part-time student/personal trainer/volunteer like me.

 

[Lshapley]

No one has even mentioned the outrageous monthly insurance premiums you will be paying in addition to the car loan. You crazy.

 

[Doctor Bagel]

Your loan money that's left over after tuition and fees is just deposited in your bank account, so theoretically you could use it for whatever you want. So maybe if you have no living expenses, you could use the extra money to make the loan payments on a $45k car -- don't know for sure, but I guess it might be possible. However, no school will increase your financial aid budget to buy a new car. They might increase your budget for extra transportation costs and even for car repairs (heard of this one recently), but they cannot increase it to purchase a car.

Also, why in the world would you want a car that expensive when you're in medical school? Save that for when you have some income. If you need a car, buy a used Honda or Toyota with good reliability ratings and good fuel economy.

 

[TMP-SMX]

Come to Wayne State with that thing, park on the street with the doors unlocked, and wait for it to get stolen. You are nuts. You'll never be able to get that much cost of attendance above your tuition.

 

[Rotinaj]

This has got to be a joke, only an idiot would ask that kind of question in all seriousness.

 

[zinjanthropus]

Theoretically federal student loans aren't supposed to cover car payments, but lots of students manage to make car payments on their loans. They thing is that they give you a lump sum of money each semester/quarter, and it's up to you how to budget it. If you needed to make a car payment, you could probably find ways to carve out the money in your budget. So if you absolutely have to get a car, you can do it.

I would recommend skipping the mustang, though, and buying something like a used civic or corolla.

Actually you can use your loan money for car payments and, even more importantly, your financial aid office can add car payments (I believe $250) to your budget. Ours do it for any student that asks.

You can also do some other nice things with your loan money - buy 1 computer during med school and cover day care for any kids. These are all things that can be added to the budget and then covered with your loans.

 

[zinjanthropus]

Actually you can use your loan money for car payments and, even more importantly, your financial aid office can add car payments (I believe $250) to your budget. Ours do it for any student that asks.

You can also do some other nice things with your loan money - buy 1 computer during med school and cover day care for any kids. These are all things that can be added to the budget and then covered with your loans.

 

[TMP-SMX]

Actually you can use your loan money for car payments and, even more importantly, your financial aid office can add car payments (I believe $250) to your budget. Ours do it for any student that asks.

You can also do some other nice things with your loan money - buy 1 computer during med school and cover day care for any kids. These are all things that can be added to the budget and then covered with your loans.

Agreed on the computer. Some schools allow emergency increases in your CoA if you need an emergency car repair. I don't think you would be able to buy a new car with it. A used car maybe but for the most part it's not going to be a whole lot they can give you extra.

 

[anisocoria]

my advice (and this likely is congruent with the advice of most sane people) is to do everything possible to minimize expenses during college and medical school. Why do you want to add to your debtload, which will likely be huge after medical school anyway? That's just nuts. Even if your school loan interest rates are great, you still want to minimize this debt because it will just be a monkey on your back for years to come. If you had an extra $45,000 (and frankly I don't know how this would be possible, anyway) you'd be better to put that into a retirement account instead of completely into a luxury car, which is not a good use of resources no matter how you look at it.