JustPassing Posted October 5, 2012 Share Posted October 5, 2012 School starts in January. I have a 99 Honda, but would like to "upgrade" to something 2004 or newer to help decrease the risk of having to be at the mercy of a mechanic in a foreign city (Not to mention don't want added unnecessary stress). My Question I was going to sell my 99 and pay cash for the newer one. But got to thinking, I could just take out a $6,000ish loan @ 1.79% interest right now and use my cash towards school expenses instead of loan money that is @ 6.8% interest. I know very little in regards to student loans and how they work, approval, etc and am wondering if there would be any cons to this? Thanks in advance Link to comment Share on other sites More sharing options...
vaston Posted October 5, 2012 Share Posted October 5, 2012 When in doubt: Pay cash. All you need is something to get you to and from school and rotations. Link to comment Share on other sites More sharing options...
jen0508 Posted October 5, 2012 Share Posted October 5, 2012 your smart for upgrading your car. my 99 Honda broke down 7 months before graduation. Was a hassle trying to get around with no car for a week, Luckily i'm from the city I went to school in so I had friends to give me a ride to my rotation site but it was still a total inconvenience to them. Also sucked trying to car shop while on rotations. Luckily my preceptor was understanding and gave me a day off. If you get a loan I wouldnt spend the money on school up front. I would keep it saved as a "rainy day" fund through out PA school (unless you already have one), you'll never know when you may need additional money and may not have time to get extra loan money. anywho thats just my 2 cents Link to comment Share on other sites More sharing options...
pafguy77 Posted October 5, 2012 Share Posted October 5, 2012 Good advice "jen0508". It will save you lots of time and stress if you already have a car or car pool in place ahead of time instead of getting all of that sorted out during school. Not all of us can pay in cash though so just try to use your money wisely. Best of luck! Link to comment Share on other sites More sharing options...
cinntsp Posted October 5, 2012 Share Posted October 5, 2012 School starts in January. I have a 99 Honda, but would like to "upgrade" to something 2004 or newer to help decrease the risk of having to be at the mercy of a mechanic in a foreign city (Not to mention don't want added unnecessary stress). My Question I was going to sell my 99 and pay cash for the newer one. But got to thinking, I could just take out a $6,000ish loan @ 1.79% interest right now and use my cash towards school expenses instead of loan money that is @ 6.8% interest. I know very little in regards to student loans and how they work, approval, etc and am wondering if there would be any cons to this? Thanks in advance It won't really matter unless you will have some income to pay the auto loan back. If you're paying a 1.79% loan with a 6.8% loan then you're losing more money than if you had just paid outright with the student loan money. You're probably better off paying in cash cost-wise. Link to comment Share on other sites More sharing options...
uscbigdawg Posted October 5, 2012 Share Posted October 5, 2012 When in doubt, cash is king. Never use your reserves unless you have to. $6k at 1.79% is a nothing car payment (especially if going with a standard 48-60 month loan). Depending on the sales tax on your state, you're looking at less than $150/month. Gas is a wash and the insurance will certainly be less than $50/month. So...$200/month (which is less than most grocery bill's for half a month), you're good to go. Buy the newer car as if nothing else, it's cheap peace of mind. Rich Link to comment Share on other sites More sharing options...
Just Steve Posted October 5, 2012 Share Posted October 5, 2012 All my private and federal loans were at the mercy of the school's financial aid office. The office has a set price that they are willing to verify for the program. Any monies needed above this amount has to be requested via a statement from me WHY I need the extra money. This way people are not using subsidized student money to purchase non school things. So even though Wells Fargo approved me for a loan far and above the needs of my program, the money was still filtered through the financial aid office and I only got what was "allowed". Which was plenty..but still made me feel like I live in a Mother May I society Link to comment Share on other sites More sharing options...
mackjacks Posted October 5, 2012 Share Posted October 5, 2012 Another thing with student loans and the financial aid office...at my school, they disburse your loan in segments each semester. You don't get it all up-front where you could use a big chunk for a car right off the bat. Link to comment Share on other sites More sharing options...
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