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In MB, what should I know about student borrowers for car loans?
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Car Loan Glossary • mb

In MB, what should I know about student borrowers for car loans?

Student borrowers in Manitoba often face unique challenges securing car loans due to limited or no established credit history and potentially irregular or lower income streams. Lenders, assessing risk based on factors like the 5 Cs of Credit, will scrutinize your capacity to repay. Without a strong credit profile, you'll likely need a co-signer - typically a parent or guardian with a solid credit score and stable income - to guarantee the loan and mitigate the lender's risk. Alternatively, a substantial down payment can significantly improve your chances, as it reduces the loan amount and demonstrates your financial commitment. Be cautious of extended loan terms (e.g., 84 or 96 months) often offered to reduce monthly payments; while seemingly affordable, they lead to much higher total interest paid, increase the risk of negative equity, and can trap you in a cycle of debt, especially with a depreciating asset like a vehicle. Always consider the total cost of ownership, including insurance (which can be higher for younger drivers), fuel, and maintenance, when budgeting for a car loan in the current 2025 market.

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