Can I Use a Student Loan to Buy a Land Rover Discovery?
You can’t use student loans to pay for cars and whatnot. You could argue this as transportation but it probably wouldn’t stand up to scrutiny from the bank/feds. The promissory note I signed was subject to perjury laws since my loan was backed by the US Govt. If they make an example out of you, you could end up in jail where you’ll only be subject to hot prison sex. I have direct student loans and they were govt money paid through the school less fees and stuff. Your school does an assessment of your need for loans and your loan amount is based on that [they seemed to lowball the costs of room and board big time, but were generous with books and supplies]. Your school would have to be really expensive if you can net out $9000 after your tuition is paid for. If you’re under a certain age [23 or something I think] your school will include money your parents can chip in to your financial need. If you can afford school without taking out loans to pay tuition and reg fees consider yourself
While I was away I scrapped the student loan idea, on the legality aspect. I was hoping to save a few bucks. I think a few things were missed, such as the fact that I was not buying over my head. The student loan thing was not for deferrment but for a lower interest rate. Basically someone offered me good value on my jeep ($7000 vs $2000 at the dealership — which obviously didn’t want to buy it) because they knew that I kept it like fine jewelry and that it was the best they’d get for the year/miles. I was afraid that if I kept it longer it’d start to show serious mechanical troubles as there’s only so much I can do to a car before having to take it in. Anyway I was looking at my situation, how much I had saved up, how much disposable income I have ontop of paying everything and it came out to about $250 a month, saw that Land Rover Discovery’s were slightly less than $20,000 for the year/miles I wanted and thought “A car I always loved! At a price I can afford!” and start jizzing all
All the legal issues aside, you’d hardly be the alone in doing using your student loan money for something you’re not supposed to. I’ve known many people who actually needed X amount in loans, but they qualified for much more than that; especially in their last year of school, they took out more than they needed for expenses like buying a car, the post-graduation move, wedding expenses (I can go on and on). From a purely financial point of view, if you’re going to take out the loan anyway, you can’t beat some of the federal student loans for interest rates. You can get some loans now in the 3% interest range which is a huge difference than most any other lender. I’m not saying its okay to do; but once the schools disburse the money, there’s not many people keeping an eye on it.
I guess the main problem I’m running into is that my parents have made me financially independent (read, 18 you’re out of the house), but being that I’m under 23 every place I go to assumes my parents (who unfortunately for me are in an upper tax bracket) will co-sign and such. This makes getting anything very hard (I had to jump through a lot of hoops to even get a credit card so I could establish credit). If the CPA hadn’t mentioned studnet loans I would have probably groveled to the bank for a high interest loan and constantly heard the “have a parent sign for it and you could get it so much easier”. On Preview: It is a used car I’m getting. 2000-2001 with around 20,000-30,000 miles brings it into the $20,000 range. I’d never buy new unless I was filthy rich and cared nothing about money. Anyway don’t get me started on how I hate that everyone assumes that a legal adult has parents to back them up. I had to forgo my top school choices (different city, more expensive living, no good
