Okay! ! Let's go to driving school! Let's get a driver's license! Are you wondering if you should take out an installment loan to pay for the course, but the cost of the training is so high that you cannot cover it with your own savings, or that your future cash flow is difficult? ?
We have covered everything related to driver's license loans here, so if you read it, we will explain things that are difficult to ask the driving school staff regarding loan screening, and things you should check when applying. We have also prepared an actual loan simulator, so please try to get a better idea of how much interest will be charged depending on the number of payments. Once you have finished reading, you will not have to worry about paying your loan at a driving school. On the other hand, it would be great if you could enjoy a happier car life by getting a loan.

1. A loan from a credit company affiliated with the driving school is definitely recommended.

Three payment methods available at the driving school

Driving School generally offer cash payments in a lump sum, cash installments, and loan payments.

lump sum cash payment

Lump-sum cash payment allows you to pay the total cost in cash at the time of enrollment, including short-term and priority reservation options and peace-of-mind options that eliminate additional costs. In this case, please bring cash to the school reception and pay.

cash installments

With cash installments, you generally pay the entrance fee and course fees in cash at the time of enrollment, and pay the skills fee and examination fee each time you make a reservation. In this case, the total payment is the same as a lump sum cash payment.

loan payment

What is a loan from a credit company affiliated with a driving school?

Generally, the cost of obtaining a driver's license at Driving School is expensive, ranging from 250,000 to 300,000 yen. Just like there is a mortgage when purchasing a house and a car loan when purchasing a car, there are loans that allow you to pay the license acquisition fee in installments, and all Driving School across the country are affiliated with credit companies. In addition to Driving School, agencies that introduce driving school plans and university co-ops can also apply for installment loans from affiliated credit companies.

What is the difference between cash installments and loans?

For cash installment payments, there is no examination at the driving school. On the other hand, in the case of a loan, in addition to applying to the driving school, you must apply for a loan from a credit company, and only after passing the prescribed examination can you make the payment in installments. In this case, an interest fee will be charged in addition to the training fee. Interest charges vary depending on the number of payments.

Now, let me explain it clearly.

Because of this interest burden, those who can afford it should choose a low number of loans that will minimize interest charges.

2. Three reasons why we recommend a loan from a credit company affiliated with a driving school

1. The customer's payment needs are that no down payment is required. In the case of cash split, approximately 30% of the total tuition fee (admission fee and course fee) must be paid at the time of enrollment.
2. The payment period (number of times) can be freely selected. How many times can I pay in installments?
   (1) When obtaining a driver's license, there is a nine-month training period. In fact, the average number of payments made by customers who apply for a loan to a driving school is 13 times, and many people request payments over a year, so long-term payments match the latent needs of loan users. It can be said that we are doing so.
   (2) Also, payments can be made over a maximum of 60 payments (5 years), so the principal alone will be approximately 300,000 yen for the training fee ÷ 60 payments (5 years) = 5,000 yen + interest payment .
3. You can select the start month of payment.
   (1) For example, if your plan is, ``I currently have no income, but I plan to start a part-time job next month, so I'll be able to save some money in about 6 months,'' even if you start taking out a driver's license loan this month. It is also possible to start payment after 6 months. (Commonly known as a skip loan.)

So, how many people actually use loans?

One in five license applicants use a loan

In the overall market, 15% to 20% of people use loans to obtain their licenses. The affiliated loan with the credit company that we introduce at Driving School is a specific purpose loan that "applies only to training costs", so even minors can apply with the consent of their parents. It is characterized by a large number of users.
Below is a quick reference list of application criteria for major credit sales companies in the driving school industry.

*After October of graduation year

There are also benefits for the driving school.

In addition, there is no need for the driving school to manage accounts receivable, the risk of bad debts can be prevented, and those who use the cash split method will pay the skill fee each time the training is conducted. We recommend a loan because some students have to suspend their lessons for a long period of time because of this.

3. The difference is obvious compared to other loans.

Next is a comparison table for credit companies, bank loans, and consumer finance.

Because loans from credit sales companies are more advantageous for customers than other loans, driving schools across the country have contracts with credit sales companies. On the other hand, bank loans and consumer loans cannot be applied for by minors (18 or 19 years old), and drivers license loans are considered unsuitable because they require a person with a stable income.

4. Examination is fine! ? Will 1 in 5 people be sent off?

However, this does not mean that all loan applicants pass the application screening, and more than one in five loan applicants are rejected.
In the market as a whole, the approval rate for on-campus examinations is 80-90%, and the approval rate for training camps is 60-70%. Conversely, at school, more than 1 out of 10 students reject the application, and at training camp, 3 out of 10 students reject the application.
Now, I will introduce the reasons for rejection for minors and adults.

5 reasons cited as reasons for refusal by adults

1. Accidents in the past: If repayment is not made by the 61st day after the payment due date, it will be registered with the credit information agency as a long-term delinquency.
2. Payment delays: Credit information agencies display payment information for the most recent two years, and in cases where only a portion of the invoice amount is deposited on the scheduled date, or where no payment is made, this information will be shared.
3. 残多し：年収に対するローンの返済割合が高いケースです。（概ね３５〜４０％に達するとNG）
   例：既存借入＋新規借入において、１５０万（年間のローン返済）➗３５０万（年収）＝４２.８％（返済比率）
4. There are weak points in the attributes of the contractor: If the evaluation materials are weak at the time of screening, such as ``short years of service'', ``short years of emigration'', or ``annual income is low relative to age'', it may be difficult to pass the screening.
5. Application by someone other than the policyholder: Although the person who originally obtained the license is the person who is applying, if the applicant is a family member, there is a reason why the policyholder himself/herself cannot use the loan, so we will decline the application based on a comprehensive judgment. There's a case.

Two reasons cited as reasons for refusal of minors

1. Since this is almost my first time using credit sales, in the above cases, most of the rejections are in ④ and ⑤.
   The above are the main reasons for rejection, but depending on the circumstances of the examination results, there may be cases where the applicant is re-examined as a guarantor, or cases where the procedure is changed to a written one. Since the examination for driver's license loans is carried out by the credit sales company, the details of the examination and the examination results will not be made public.

5. Actual simulation: How much does it cost each month? Until when will you pay?

Deepen your image with simulation

Now, we have actually prepared a simulation.
For your reference, we will use one credit company as an example to show you how much interest charges are incurred when dividing a loan.

Credit card vs license loan: Which is better financially?

If you pay the training fee of 300,000 yen with a credit card and pay in 20 installments, the installment fee will be 40,800 yen and the total payment amount will be 340,800 yen.

Credit card installment fee Monthly interest rate: 0.68% (actual annual rate 13%~15%)

If you pay by credit card, you will receive card points, but generally it is around 0.75%. Therefore, 300,000 yen x 0.75% = 2,250 yen is equivalent to card points.
The customer will be responsible for the difference between the above split fee and card points of 38,550 yen. There is also the possibility that your credit card usage limit will suddenly decrease, making it difficult to use your credit card for shopping, etc. from that month onwards.

Next, if you pay a training fee of 300,000 yen with a driver's license loan, and if you pay in 20 installments, the installment fee will be 25,530 yen, and the total payment will be 325,530 yen.

Driving license loan installment fee effective annual rate 9.5%

In the case of a driver's license loan, compared to a credit card, the monthly burden can be reduced by 15,000 yen in total, or just under 800 yen per month.

Conclusion: Pay in installments with a credit card with card points in mind. Considering the actual burden, a driver's license loan is definitely more economical.

【lastly】
Obtaining a driver's license is like getting a ticket as a member of society. We have explained driving school loans here, but the loan user will be responsible for paying the debt, and the driver will have the qualifications obtained by protecting the safety of others and taking responsibility for the traffic society. is. As a new member of society and a novice driver, I sincerely hope that your driver's life will be long and prosperous.