Since the day most of us have turned 16, access to a car has represented many things: freedom, spontaneity, and flexibility. However, if you’re trying to pay off student loan debt, a car comes to represent less positive things.
In fact, living without a car can actually free you financially and prove to be one of the best moves you can make to improve your financial situation.
Here are just a few of the reasons why it may benefit you to give up owning a car in favor of other forms of transportation.
1. Plenty of other transportation options
These days, there are so many options for getting around that owning a car is no longer necessary.
Here are just a few examples:
- Renting a car when necessary, or using services like car2go
- Getting a taxi, or using services like Uber or Lyft
- Using public transportation including bus, light rail, or subways
- Taking advantage of self-propelled forms of transportation like walking or biking
Living without a car doesn’t mean you have to stay home all day. There are plenty of ways for you to get to where you need to go, whenever you need to get there.
2. Freedom from monthly payments
Whether you are buying a car or leasing one, you are making monthly payments.
And even if your car is paid off, there’s still car insurance to think about. Living without a car frees you from these expenses and gives you breathing room in your monthly budget.
Public transportation passes cost a fraction of a car payment. Even if you’re supplementing with services like car2go, Uber, or Lyft, it’s unlikely you’ll pay more than you would on car or insurance payments.
3. Liberation from unexpected expenses
The unexpected expenses associated with a flat tire or engine failure can be challenging to fit into a budget if you’re still trying to pay off debt.
Living without a car means you don’t have to be afraid of the check engine light coming on at the worst possible moment. It also means not worrying about other unexpected expenses, such as paying to park or getting a ticket.
If you don’t have a car, you’re also free from spending money on maintenance issues designed to prevent breakdowns from occurring in the first place.
While maintenance costs are not unexpected, they are irregular. They can also sneak up on you when you least expect them.
Not having a car means not glancing up at that sticker in your windshield and thinking, “Crap, time for an oil change and tire rotation.”
4. No need for a gym membership when you’re living without a car
Increasing the amount of biking and walking that you do will not only have a positive impact on your health. It may also mean that you no longer have to shell out for that expensive gym membership.
Not only that but since you will be working out throughout the day, you are also free from having to work time into your busy schedule to get to the gym in the first place.
5. Enjoy that extra free time
When you are the one behind the wheel, you have to pay attention to the road.
However, with alternate forms of transportation, someone else is doing the driving instead. That means you gain back that time for other things.
You could use that time to catch up on your reading, listening to a podcast, or even binge-watch your new favorite tv show. While it may take longer to walk or bike from place to place, you can use that extra time productively.
Challenge yourself in the short term, gain long-term financial health
For many of us, the idea of giving up our cars can seem like an almost impossible sacrifice.
However, living without a car while you’re getting your debt under control can be one of the most impactful financial changes you can make to improve your situation.
In fact, once you’ve gotten used to living without a car, you may find yourself wondering why you ever tethered yourself to such an expensive and unnecessary item in the first place. What you originally envisioned as a short-term solution may, in fact, result in a permanent lifetime change.
The longer you can go without a car in your life, the longer you can spend that money on other financial goals such as debt repayment, retirement contributions, or savings.
What are you waiting for? The freedom of a car-free life could be yours.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|