Am I Able to Get a Loan as a Student

Lninnypoop on 05/10/2019 - 10:18
Last edited 06/10/2019 - 12:37

Hi all,

Hoping the more finance savvy amongst you will be able to help me out. Or at least give me some clarity.

Some back ground: I am currently a student completing my honours and have a post-grad job lined up for next year. This position will be paying a salary of $63k. Contracts will be signed in December, but I will not start working til Feb 2020. I have worked throughout my undergrad and have manged to save $20k which I have in the bank now. Though this year during honours I have cut back on part time work and only been making about $100/week.

Now my question. Do you think I would be able to get a $20k car loan?

Reason being, is that my current car crapped itself and I need a new car for summer.Im looking at 4wds,specifically the Mitsubishi pajero.

The car I want is $20k, so I could actually buy it outright but that would leave me almost penniless over summer and without a safety net.
I want to enjoy my last university/work free summer and not work flat out.
I imagine ill pay this loan off within 1 year once Im working full time in my new job cause Ill happily shovel most of my savings to be gone of the loan knowing that I have a weekly wage.

Is a 20k car loan the best way forward? Considering I want to have it payed off in about 12 months
Are there better options to borrow 20k? maybe a personal loan?
Will the bank/lender even give me a 20k loan with the $100/week ive been earning? Though I do have the 20k in the bank

Financial

Comments

  • mbck on 05/10/2019 - 10:21
    +22

    Get a cheaper car. Live within your means. Or live with the consequences of your choice.

    Car loans are biggest ripoff.

    Ps why do you need a pajero?

    • ninnypoop on 05/10/2019 - 10:30

      I understand what you are saying but I went into uni as a mature age student so ill be 29 when I finish. Ive had old cars since I was 17. I dont disagree that an older car would do the job but now that I am finally going to be in a stable job (come Feb) which I enjoy I want a decent car which will last me as long as possible.

      I will also be traveling about 40mins to my new job. So something more comfortable and safe would be nice.

      Pajero because I want a 4wd and Toyota's are more expensive. My family live in the country and I grew up in the country NSW so travel from Melbourne to Northern NSW at least once a year. My mum just moved to Qld so will be driving even further on holidays to see all the family. I am a avid camper and bush walker, so spend spare weekends away. Me an my partner go on multiple trips a year where a 4wd would be nice. Until now I had a commodore station wagon which did the job, but a 4wd would be much more suited.

      My partner has a small run around which we use when running around the city.

      If my current car hadnt broken down then I would be keeping that until I could afford to buy my car of choice outright. And it aint worth fixing my current car. Ive been fixing it for the last 4 years and its at a point where its not worth it anymore

      • mbck on 05/10/2019 - 10:37
        +2

        Sure that's what you want. But can you live with the consequences?

        If you could get a loan (which i doubt), you'll be paying more than 20k to repay that loan. That includes the set up cost and the interests. Depending on who you go with, these extra costs can pump your loan much higher. Not to mention the risk of extra repairs considering you're still looking at 2nd hand car.

        But with loans, they're looking at your income, not saving; specifically pay slips from the past 3 months or so. Which makes you borrowing anything a moot point imho.

        There is want and there is need. You need to find that balance with your current situation.

        • ninnypoop on 05/10/2019 - 10:41

          Yeah, I think the 3 month payslip thing is def going to get me. I thought it may have been the case but never dealt with loans, hence me asking around here

    • CyberMurning on 05/10/2019 - 10:30

      Maybe instalment from car dealer?

      • ninnypoop on 05/10/2019 - 10:42

        Ill look into it. Though I am weary of car dealers and would never imagine getting a loan through them

  • juzza87 on 05/10/2019 - 10:37
    +8

    If I were in your position and your future income isn't guaranteed until your contracts etc. have been signed and you need a car (I think you do because you mentioned the country - might not have great or any public transport) I would spend $5000 on a Toyota Corolla. It'll be reliable, fuel efficient and when your income has been secured you could sell it for the same or possibly more than you spend (they hold their value) and use cash to buy the Pajero.

    Interest on car loans is quite a bit and don't forget establishment and early exit fees, your $20,000 will be closer to $25,000 at the end.

    • ninnypoop on 05/10/2019 - 10:40
      +1

      This was actually my second line of thought (exact car and all). Which I think deep down I knew was going to be the best option.. Was hoping someone here might tell me otherwise haha

    • Goldenwarrior on 06/10/2019 - 08:37

      Best advice, if you have to get a car buy a Toyota Corolla or Yaris.

      The problem with a 4WD is the increased cost for parts/tyres/servicing.

  • [Deactivated] on 05/10/2019 - 10:50
    +2

    During the banking commission the banks were accused of issuing loans that clients didn't have the history or means to pay. Future income isn't really a major consideration of a loan. It's a steady history and a stable present. I think you should struggle from a reputable lender as you need a steady income history and banks are under pressure to demonstrate means to repay.

  • RockyRaccoon on 05/10/2019 - 11:05
    +1

    Oh go ahead with you loan whatever, but you will be paying for it with a s/h Pajero at the 20K mark

    • ninnypoop on 05/10/2019 - 11:08

      Whats wrong with the late model NW pajeros or early model NX? 2013-2015 mark. Theres a few with under <200k kms and full service history. Or just your personal opinion?

  • follow on 05/10/2019 - 11:12

    do you get government assistance?

    • ninnypoop on 05/10/2019 - 11:20
      +3

      Yeah I have been the last two years. Austudy.

      I am also a qualified electrician that payed full tax for 6 years before deciding I wanted a career change and went to uni to get myself into a career so I could somewhat enjoy my working life.

      This year has been hectic and in order to secure myself a post-grad job I needed first class honours so I havent been able to work as much. So yeah, got austudy to help pay rent and food.

      Its a great system we have and I am very thankful for it.

      • follow on 05/10/2019 - 11:40

        get a personal loan instead?
        some lenders take into account government assistance.

        • ninnypoop on 06/10/2019 - 10:50

          Thanks for the heads up. Wasn't sure if they would take austudy into consideration. Cause that does add an extra $250/week to my income .but I assumed they wouldn't count it.

  • profar on 05/10/2019 - 11:17

    Check your credit rating ?

    If its ok may you could be eligible for one of those low interest loans from deals like this : https://www.nissan.com.au/offers.html#category=Offer

    But be careful they work on screwing you on the initial price !

    • ninnypoop on 06/10/2019 - 10:49

      Will check it out. But not so interested in a new car

  • Ughhh on 05/10/2019 - 11:18

    Can you afford the monthly repayments + bills + other expenses?

    • ninnypoop on 05/10/2019 - 11:22

      I have the savings safety net for now. But come Feb I will be able to. I currently live on about $30k/year. So my future income will surely suffice

      • Ughhh on 05/10/2019 - 13:42

        Income > savings. They care about your current stable income now rather than future (exceptions if maybe you're a famous person).

  • PissLUR on 05/10/2019 - 11:36

    i think you should just spend your savings to buy the 20K car.

  • gmail92 on 05/10/2019 - 13:02

    Search for estimates for 1 year loan interest rates, look at the interest total amount, and then evaluate if you feel its worthwhile the interest for the convenience.

    eg. https://www.westpac.com.au/personal-banking/personal-loans/c…

    If you can't pass the credit test, you can't pass. That's that. We can't answer that question because we're not giving you a loan.

  • spackbace on 05/10/2019 - 13:23
    +1

    Car loan - no. You don't have capacity with your current income.

    Buy a $10k car and leave the rest of the savings.

    • ninnypoop on 06/10/2019 - 10:48

      A good point

  • chumlee on 05/10/2019 - 14:53
    +12

    If you can get a loan, then we need another royal commission.

    • ninnypoop on 06/10/2019 - 10:48

      Didn't the banks investigate themselves during the last royal commission? Why would you consider that the last royal commission was worth anything

  • Skramit on 05/10/2019 - 16:09
    +3

    Any financial institution will simply want to see proof of income (i.e. payslips) in order to loan you money. It's that simple. Future promise of a potential job means nothing.

    So no, you cannot on $100/wk.

    Put it another way:

    A stranger you have never met asks you for $20k for a car loan. They don't have a job to cover repayments but promise they will get one soon.

    Do you a) laugh in their face or b) loan them the money?

  • dasher86 on 05/10/2019 - 16:16
    +3

    Buy a $5k car now.
    Once you've started and save a bit sell the car for $5k and get your pajero

    • ninnypoop on 06/10/2019 - 10:46

      Def going to be considered.

  • [Deactivated] on 06/10/2019 - 05:51
    -1

    Hoping the more fiance savvy amongst you will be able to help me out.

    I don't know much about fiances other than they do tend to want to be promoted to spouse pretty quickly. I did :p

    +1 for the Corolla

    • ninnypoop on 06/10/2019 - 12:38

      Thanks haha. fixed

  • ozbargainoid on 06/10/2019 - 08:45

    About 6 years ago my daughter was studying full time at Uni. In her final year she found a deferred car loan from NAB. It came with a student reduced interest rate and no repayments for the first 12 months.
    I thought it wasn't a very good way to buy a car as the cost to service the loan would have been high, but it suited her requirements at the time.
    She borrowed $20k and paid it back in 6 years.
    If I remember correctly it only applied to new vehicles.

    • ninnypoop on 06/10/2019 - 10:45
      -6

      Thank you. This was the kind of answer I was looking for. Real world experience.

      I wasn't aware these student loans were available. I'll have a look around.

  • ninnypoop on 06/10/2019 - 11:17

    For anyone playing along at home.

    ING do a personal loan on a fixed rate of 8.99%. Establishment fee waived because I have an account with them. No monthly fees. No early termination fee.

    So if I could borrow $20k and pay it off fully in 12 months would I be $1800 out of pocket at most?

    Not saying this is the best option or that I would even get the loan. But is this correct? I'm novice with loans.

    • spackbace on 06/10/2019 - 11:44
      +3

      Just because they have the loan, doesn't mean you can get it. You don't have the income to support a $20k borrow!

      But feel free to apply so we don't get more of these stupid follow up questions

      • ninnypoop on 06/10/2019 - 11:53
        -7

        Thanks for the helpful answer.. you wasted your time even coming here. All you have done is restate something which I addressed in the question. Go away

        • spackbace on 06/10/2019 - 12:53
          +4

          Go apply for the loan

          Go on

        • Skramit on 07/10/2019 - 09:00
          +4

          OP: I'll make a thread to discuss loans that I cannot get because I dont have enough income.

          Everyone: You don't have enough income so this is completely pointless

          OP: "you wasted your time even coming here. go away"

          Everyone: Yes we did.

          • ninnypoop on 07/10/2019 - 17:00
            -1

            @Skramit: The opening post (OP) asked for opinions on whether I would get a loan considering the small income but considering the fact that I also have savings. That was answered outright by everyone else, including yourself.

            This specific question within the thread, not the OP, which both you and the guy above have directly replied to, asks specifically about a certain loan and whether there were any other costs associated that I hadn't stated. I even went as far to say I wouldnt get it, but just wanted clarity on the way loans work.
            More specifically I was asking if loans were as black and white as stated, or are there catches which I should be aware of.

            Would you rather I had made another forum post to ask the question?

            The guy above who I said had wasted his time stated that I wouldnt get the loan. Repeating something that was said many times previously. A piece of information that you answered much better in an earlier response. Your response was useful - telling me that I had no chance cause they look at income and wont consider future employment. The guy above wasted his time by replying to a separate question and uselessly repeating something that has been stated many times previously

            • spackbace on 07/10/2019 - 18:17

              @ninnypoop: No, I wasn't wasting my time more than you were by still continuing down the same path, even after multiple people had told you the same thing.

              Despite many people saying you wouldn't get the loan, you still continued to research, and then had the audacity to crack the shits at those who didn't go along with your fantasty thinking, like you knew better, despite creating a post which clearly showed you have no idea.

              The millennial stereotype is reinforced in people like you, who want everything on a platter and just can't handle negativity.

              Well done.

              As I said, go apply for the loan and prove me wrong.

          • spackbace on 07/10/2019 - 18:21

            @Skramit: Apparently the fact I said your answer before you wasn't good enough for our poor lil millennial OP

            • Skramit on 07/10/2019 - 19:42

              @spackbace: Heh

            • follow on 07/10/2019 - 23:39

              @spackbace: are you not a millenial?

              • spackbace on 07/10/2019 - 23:42
                +1

                @follow: Nope

                • follow on 08/10/2019 - 00:03

                  @spackbace: always thought you were late 30s… dont know why lol

                  • spackbace on 08/10/2019 - 00:06
                    +1

                    @follow: Well that's not a millennial 😉

                    Well ok it's technically defined as 1981-2006 (thanks Wikipedia) but pfft that wide a gap is dumb lol

                    • [Deactivated] on 08/10/2019 - 00:25

                      @spackbace: That gap is crazy! I was conceived, born, lived in RSA, got sent to live with my grandparents in Oz, attended prep, completed high school, graduated from uni,fell in love, convinced her to elope with me, got married,bought a unit ,went back to uni, sold our "cockroach-infested love-nest" , bought a house, completely renovated it, found out we were expecting twins, sold that house, bought another one with a garden, graduated from uni for a second time… All within that gap. WTH?! Lol!

                      • spackbace on 08/10/2019 - 00:27

                        @[Deactivated]: Why is your life story like 1 of the shortest posts you've made? 😉😂

                        • [Deactivated] on 08/10/2019 - 00:32

                          @spackbace: Cos I've left out all the juicy details🤣

                          • spackbace on 08/10/2019 - 00:35

                            @[Deactivated]: You didn't waffle! 😮

                            • [Deactivated] on 08/10/2019 - 00:57

                              @spackbace: Nope. No more. If you want my special brand of waffling, you'll have to buy my book :)

                    • spackbace on 08/10/2019 - 00:29

                      @spackbace: And actually before someone corrects me I'll correct myself:

                      Researchers and popular media use the early 1980s as starting birth years and the mid-1990s to early 2000s as ending birth years, with 1981 to 1996 a widely accepted definition.

                      So that's 81-96 for those playing at home.

                      • [Deactivated] on 08/10/2019 - 00:36

                        @spackbace: Looks like the official guideline is :

                        • The Silent Generation: Born 1928-1945 (74-91 years old)

                        • Baby Boomers: Born 1946-1964 (55-73 years old)

                        • Generation X: Born 1965-1980 (39-54 years old)

                        • Millennials: Born 1981-1996 (23-38 years old)

                        • Post-Millennials: Born 1997-Present (0-22 years old)

                        • Skramit on 08/10/2019 - 08:12

                          @[Deactivated]: I'm sure there's some recognition that there's a generation born from 1981 to about 1988 who had childhoods like gen x - i.e. played outdoors, climbing trees and skateboarding and made friends the old fashioned way as little kids. But then embraced computers and the internet by the time they left school kinda like millennial. I forgot what it's called it's Xenials or something.

                          Basically a crossover generation. I fit into that.

                          • [Deactivated] on 08/10/2019 - 08:42

                            @Skramit:

                            In establishing these new official guidelines, it also looks like the “Xennial” has been wiped from existence. This is a micro-generation that encompassed those born between 1977 and 1983—they identified themselves as people who grew up in a pre-digital world and later adapted to today’s technology. If this includes you, you’re now either a late-term Gen X’er or a grizzled veteran of the Millennial clan.

                            Source

                            • Skramit on 08/10/2019 - 08:45
                              +2

                              @[Deactivated]: Yeah basically that.

                              I don't really identify as a Gen X characteristically or Millennial. I'm def a hybrid.

                              I get that in official sources its too complicated so they wiped it out. But It's very accurate for me.

                              • [Deactivated] on 08/10/2019 - 15:14

                                @Skramit: We had the best of both worlds :)

  • fossilfuel on 06/10/2019 - 12:41

    Is a 20k car loan the best way forward? Considering I want to have it payed off in about 12 months

    Definitely not as you're going to get hit hard with the interest rate. The only loan you should get is a home loan.

    Are there better options to borrow 20k? maybe a personal loan?

    Buy a cheaper car. You can get a relatively cheap and reliable 4WD e.g toyota prado, kluger or landcruiser or a honda.

    You'll need to factor in petrol and maintenance costs. 4WDs consume a shit ton of petrol and maintenance/parts are more expensive than your sedans/hatchbacks.

    You can get a 2007 Toyota Kluger for 15k and that's before bargaining/negotiating.

    • ninnypoop on 07/10/2019 - 17:02

      Yeah looks like it will be the best option.

      Thanks

    • spackbace on 07/10/2019 - 18:18

      A Kluger isn't a 4wd, or a 4x4, it's an AWD. Without a low-range and diff lock it's not going to the same places as a 4wd.
      And diesel would be a better option over petrol for fuel range.

    • lgacb08 on 07/10/2019 - 20:52

      15k for a 12 year old soccer mum car is way too expensive even if it's a Toyota

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