How to Get an Auto Loan after Bankruptcy
Most of the banks and financial institutions are aware of your terrible situation in which you are, and would not risk their money on you. But there are many options and likewise many individual lenders who will be ready to offer you auto loan, considering the very fact that you have poor credit score.
A person with a credit score above 670, is considered to have a good credit score and can therefore apply for car loans, mortgage loans, personal loans, debt consolidation loans, etc, with no problems. In addition, people with good credit scores get better interest rates on loans than people with problem credit.
Luckily for those that know about it, there are some lenders that specialize in helping people after they’ve had a bankruptcy. There are special finance programs for people that have had bankruptcy, repossession or other credit obstacles. While most mainstream lenders will want to see re-established credit, these special finance lenders are your source for getting that first good auto loan to buy a car after a bankruptcy discharge.
Auto loans after bankruptcy are very popular because it’s one of the easiest methods for quickly re-establishing credit. The downside is that these loans carry a very high interest rate.Right after declaring bankruptcy, and maybe for a year or two thereafter, your interest rates are going to be high no matter what kind of you loan you seek. Because of these inordinately high rates, you may want to cool your heels for a year two.
Obtaining a car or auto loan after a bankruptcy discharge or dismissal can seem challenging when you try to get approved at a local car lot. Here are some tips that you can use to better understand what you’re up against and a recommendation that will help you to obtain auto financing a lot easier.
The bankruptcy filer can demand for a fresh loan to have the means to repay the amount that’s due on the loan. As a result, they can reduce their monthly pay downs and the remainder of the loan so they can hang on to their car and have a new start!
Applying for a car loan immediately following a discharge is unwise, especially if the auto loan was included in the bankruptcy. Besides, the majority of auto loan lenders will not approved the request so early. If your loan request is approved, the lender can charge an interest rate up to 22%.
Rising above a past bankruptcy requires immediate action. Restoring your rating after a major credit hiccup is possible. The key to building credit entails establishing new lines of credit. It is natural to have a low spirit after a bankruptcy discharge. Rather than focusing on the bad, work to recover from a low credit rating.