How Long After Bankruptcy Should I Wait to Apply for an Auto Loan?Getting a car loan after filing bankruptcy seems impossible, right? Wrong! There are options to get auto loans after bankruptcy, the question is; how long should you wait to apply after filing? If you have been discharged; finding a lender who is willing to help you is easier, but some lenders are willing to help you finance a car while still in the bk loan process.
The ideal situation is to wait two to three years after bankruptcy before getting an auto loan. In that time you can get a secured credit card, use it for small purchases, and pay off the entire balance every month. This will show that you are making timely payments, on your credit report, and in turn will improve your credit.
Is There Anything I Need to Do Before Applying?The process of financing a car after bankruptcy can be difficult, but these tips will help you get started:
- Know what is on your credit report
- Use a special finance lender
- Choose a practical car
By obtaining your credit report you will know exactly what lenders will see, and if you still have a balance you will be able to contact those companies until they change your status to zero.
Using a special finance lender, like the ones we work with, will benefit you because they specifically deal with people who have bad credit, no credit, or a history of bankruptcy. Getting auto loans for people who have filed bankruptcy can be more difficult when working with a company that does not have the tools, and experience to deal with special finance.
Choosing a practical car is especially important. You want to make sure you choose a car that is reliable, but cheap enough that you will be able to make your monthly payments. Since you are most likely going to have a higher interest rate because of the bankruptcy, buying a small, cheaper car will be more practical.
What if I Need a Car Now?Unfortunately, not every situation is ideal and sometimes you just can't wait that long. Open bk loans are possible, but are harder to obtain. With an open bk loan you might be required to have a down payment, and will have a higher interest rate. The biggest problem you will run into is getting approval from your trustee or judge to make the purchase, and prove to them that you will be able to make the payments on time and in full.
If you are ready to rebuild your credit, fill out an online application today!