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

Student borrowers in New Brunswick typically face unique challenges when seeking car loans due to limited verifiable income and a nascent credit history. Lenders prioritize stable employment and a proven track record of managing debt, which many students, especially those in full-time studies, may lack. This often necessitates a co-signer - usually a parent or guardian with established credit and income - to secure approval and potentially a more favourable interest rate. Alternatively, a substantial down payment can mitigate lender risk, reducing the loan amount and demonstrating financial commitment, which is crucial in the current (2025) market where interest rates remain elevated. Remember that NB's 15% HST will apply to the vehicle purchase, adding to the total cost.

Beware of extended loan terms, such as 84 or 96 months. While these offer lower monthly payments, they significantly increase the total interest paid over the life of the loan and heighten the risk of negative equity, meaning you could owe more than the car is worth as it depreciates. For students, this can create a long-term financial burden that impacts future borrowing capacity and overall financial health. Understanding these dynamics is vital for making an informed decision, ensuring the car loan is manageable and supports, rather than hinders, your academic and financial future.