Are car loans after bankruptcy possible? Fortunately, there is a specific sector of the market that focuses only on those who have bad credit. Even if you just filed for bankruptcy yesterday, you can usually still get the money you need.
What are your options?
Going with a subprime lender is usually your only choice. That’s not to say you should not attempt to get a standard loan. But if you’ve just filed for bankruptcy, then subprime financing might be your best bet.
How does bankruptcy financing work?
The applications are generally processed extremely quickly, and you do not have to fill out as much paperwork. In many instances, the companies do not perform a credit check at all. They just assume that everyone they work with has bad credit.
So anyone can get approved?
No, there are restrictions. You usually have to make at least fifteen hundred a month to be considered. The bankruptcy must have already been discharged. And if your car was repossessed in the past year, you also might not succeed.
If your credit is exceptionally bad, you might have to provide proof of income for the past ninety days. You also have to state whether you own or rent your home. Remember, the more debt you have, the less likely you are to get a good rate.
How do you pick the best financing?
Do not just pay attention to the monthly payment. Remember to check the interest rate as well. Many people forget about this in their haste to find the lowest monthly amount. This is a mistake. For instance, lender A might offer you an unsecured car loan that can be paid back at $150 month. Lender B might give you a $200 a loan repayment plan.
Is lender A better?
That depends on the interest rate and repayment period. If the second financing option is at a better interest rate, you might actually pay less over the course for the loan, even though the monthly installments are higher.
So you might want to consider the second company. However, just make sure you can handle the monthly installments. Making your payments on time is critical to rebuilding your credit.
Consider asking friends with bad credit who they got their financing through. They will be able to recommend you a good company. However, still do your research. Never pick a loan before getting at least 5-10 quotes. Make sure to give yourself a broad overview of what’s available. Failing to shop around is why many people pay more than they have to.
The truth is, getting a new vehicle after bankruptcy really is fairly easy, despite popular opinion. As long as you have the income needed, you will qualify.
Should you apply at a dealership?
While it probably couldn’t hurt, keep two things in mind. One, you very likely will not get accepted right after bankruptcy. And even if you do, you are only being quoted one rate. When you go online, you can get five to ten quotes within sixty seconds. So it’s not necessarily bad to go the dealership. Just make sure to compare the rates you get with other companies. Do not forget to check with the BBB; do this for any company you are considering. Some companies are known to harass their clients until they pay them back.
They either bombard them with phone calls or send threatening letters. You obviously want to avoid these firms. Make sure whatever company you go with is respected and legitimate.
The bottom line is, being patient is the best way to find the top car loans after bankruptcy. It’s a simple strategy, but it works.
Financing