Getting a Car Loan After Bankruptcy
Buying a car after bankruptcy will most likely not be as easy, but it is certainly possible. Although your credit score may have suffered, and it may take some time to get it back into shape, if you are up-to-date on all of your financial obligations, then getting a car loan after filing bankruptcy is most definitely achievable. There is the chance that you may be required to pay a higher interest rate than you would have prior to filing bankruptcy. As long as you are able to make the monthly payments on time, getting an auto loan can actually help you repair your credit score.
STEP 1: Work to Repair Your Credit
Perhaps one of the easiest ways of getting a car loan after filing bankruptcy is by rebuilding your credit history. Get a credit report and make sure that you clear anything that is still outstanding before submitting an application for a loan to buy a vehicle. Ensure that everything is accurate. Get in touch with creditors to try to iron out any issues on your credit report. Thereafter, take the necessary steps to build positive credit repuation: make all payments on time, reduce your spending, and get your finances in order. Also, consider getting a credit card so you can begin establishing a bank account. Also see How To Rebuild Your Credit Score After Bankruptcy
Tips From Our Experts On Getting A Car Loan After Filing Bankruptcy
Consider the following tips once you are confident enough to start shopping for an auto or car loan:
Put Down a Deposit
Save up enough so that you are able to put down a substantial down payment. The larger your down payment it, the greater the chance of you getting financing.
Get a Co-Signer
A friend or a relative with a good credit score may co-sign on a car loan. Getting a co-signer with a favorable credit score may also lower your interest rate. It is important to note that if you are unable to keep up with your payments, your co-signers will be responsible.
Purchase a Used Car
Used cars are not as expensive as brand new cars. In a bad economy, you may get a really good deal. A cheaper car means that your car loan will be smaller, and you will have a greater chance of qualifying. A low car payment is also a smart financial move. You can save up money to put towards an emergency fund.
Save Up and Pay Cash
Some financial experts say the best and easiest way to purchase a car after bankruptcy is by saving your money and paying cash. This way, you will avoid paying interest, and you don’t have to worry about qualifying for an auto loan. This plan may not work for everyone, particularly if you need a car immediately.