When you’re coming out of bankruptcy one of the first things you should do is pull your credit report to check for any errors. Once you have all discrepancies taken care of you should start to rebuild your credit profile. Buying a car after bankruptcy is one of the best ways to do so, and is easier than you may think. Below we have laid out a few steps to getting an auto loan with bankruptcy on your credit.
Five Steps to Get Hassle Free Auto Financing after Bankruptcy
- Get a secured credit card
- Use co-signer
- Prepare for a high interest rate
- Have a down payment
- Wait 2-3 years after discharge
The reason we advise consumers to get a secured credit card is because besides a car loan is the best the thing to rebuild credit. After making a few timely payments on the card you credit rating will increase which will help you get a lower APR and a better chance at being approved.
A co-singer – as long as they have good credit - can increase you chance of an approval tremendously. Just be careful of who you as because if you happen to fall behind on the payments they will be come solely responsible for the vehicle.
All bankruptcy car loans are going to carry higher interest rates than those offered to individuals with good credit and no bks. This is because you are considered a high risk to the lender, and they want to make sure if you default on the loan they can get what is owed to them at an auction.
Down payments play a huge role in obtaining vehicle financing. The more money you have to put down on the car the less you will have to finance. That results in lower interest rates, lower car payments, and overall a shorter loan term. Most bk lenders require a down payment, so make sure to have something saved up.
The ideal situation for a bankrupt individual to be approved for auto loans is to wait 2-3 years before applying. This will greatly help your chances of an approval, but here at BankruptcyAutoFinancing.com we understand that sometimes waiting that long is just unrealistic. Everyone needs a vehicle to get to and from work in order to pay their bills, and that is why we can help you.
We work with a network of subprime lenders specializing in bad credit auto loans which includes both bankruptcy and repossession. If you’re ready to see what you could be approved for; apply online today.
Remember, we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.