Your Guide to Getting a Car Loan After Bankruptcy
When you filed for bankruptcy, you did so with the knowledge that it was going to be difficult to apply for future loans. However, while a bankruptcy may make it hard to get a car or home loan, it doesn’t make it impossible. If you are in need of a vehicle but cannot afford to pay for one in cash, there are ways that you can get a car loan after bankruptcy.
Reestablish Your Credit
Though secured and unsecured credit cards generally come with outrageous interest rates, they are a great way to rebuild your credit. If you continue to pay off your balance each month or, better yet, if you pay off your card as you charge it, you should be able to keep rates low to non-existent. Within six months of making timely payments, your credit score will increase enough to earn you better rates and better deals.
Do Your Research
One of the most difficult aspects of applying for a car loan post bankruptcy is finding a lender that will not only approve you, but also, that will offer fair terms. Many lenders are willing to loan money to post-bankruptcy individuals, but they charge high interest rates and offer unreasonable terms, such as if they don’t pay the loan back within 24 months, their interest rate will double. Avoid lenders like this, as they will only serve to add unneeded stress to your life, and even cause you to default again.
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Identify the Right Deal
Finally, don’t just buy the cheapest car there is. While a cheap car may seem like a good deal now, it will only cost you money in the long run, as it will need ongoing maintenance and repairs. Additionally, a lender will be much more likely to help you out if you purchase a newer car, as opposed to an old and decrepit one.
If you need to get a car loan after bankruptcy, follow the advice above, and you should be back behind the wheel and on the road again in no time.