Loans - Personal, Auto & Student Loans | Bankrate (2024)

FAQs

Can you have a car loan and a student loan at the same time? ›

Student debt doesn't impact your ability to buy a car directly, but it can play a role. When you apply for any loan, including an auto loan, the lender will check your debt-to-income ratio.

Be sure to understand the difference between private student loans and personal loans. They sound similar, but there are important distinctions: Private student loans are for education, while personal loans can be used for things like consolidating credit card debt, making home improvements, or paying for a wedding.

Short answer: Yes, you can still get a personal loan when you have student loans. However, with student loan debt, it may be more difficult to qualify. When you take out a personal loan for any reason — like debt consolidation or student loan refinancing — creditors usually look at your credit score and credit history.

A personal loan will cause a slight hit to your credit score in the short term, but making on-time payments will bring it back up and can help improve your credit in the long run. A personal loan calculator can help determine the loan repayment term that's right for you.

TransUnion reports that a "good" DTI to qualify for a car loan is about 35% or lower. If your DTI, including your student loan payments, is 35% or lower, it should not impact your ability to get a car loan.

Yes, you can still get a car loan if you have already taken a personal loan. However, the loan amount you are eligible for may be low in such a case. A lender decides your eligibility based on your credit history and repayment capacity.

A Personal Loan is money you borrow and pay back with a high or low interest rate over multiple years. However, a Personal Finance is a Shariah-compliant product designed to provide you with liquidity based on the Shariah concept of Murabaha (cost plus profit). Thus, this product is riba-free.

If you have multiple loans, it's generally a good idea to pay off high-interest loans first. Private loans often have higher interest rates compared to federal loans, so paying off private loans quickly can save you money in the long run.

If you don't meet baseline eligibility requirements, or if you've previously defaulted on a loan, you may not be approved for a federal student loan. You must maintain "satisfactory progress" in school to be approved for student loans. You can take steps to regain or improve your eligibility for student loans.

Can I get a personal loan and student loan at the same time? ›

Yes, you can get a personal loan if you have a student loan, although you may have some difficulty if you're a student with limited credit, low income and a high amount of debt.

Many lenders actually have terms that prohibit the use of a personal loan for paying off student loan debt. If you aren't sure if a particular lender will allow you to use the funds for this purpose, you should be up front about your intentions to avoid breaching the lender's terms of use.

To qualify for a personal loan, borrowers generally need a minimum credit score of at least 580 — though certain lenders have even lower requirements than that. However, your chances of getting a low interest personal loan rate are much higher if you have a “very good” or “excellent” credit score of 740 and above.

Personal Loan Maximums

Most lenders state that their maximum personal loan amount is $50,000, though some will go as high as $100,000. Some borrowers, usually wealthy and with high credit scores, might be able to borrow more.

You can use student loans to pay for a college's cost of attendance, and the cost of attendance includes transportation, so can you use student loans to buy a car? You cannot use student loans to buy a car. If you live off campus, having a car may be a necessity, but the college doesn't require it.

If you have private student loans, it's often not worth using those funds to purchase a car. Even if your contract allows it, it's more expensive over time than an auto loan.

If the interest rates are the same, you should prioritize paying down the auto loan, as you may be eligible for the student loan interest tax deduction. It's also important to consider that your auto loan is secured by the automobile.

While no legal restrictions stand in the way of having two auto loans simultaneously as long as you can meet the lender's requirements, there are practical limitations to consider. You usually cannot have more than one loan per car, though you can potentially refinance the loan to get a better deal.