Bankruptcy may sometimes feel insurmountable, but there are now several solutions that can provide relief when you are in this financial situation. Although bankruptcy sometimes carries a stigma and may be seen as a failure within our society, according to financial institutions, it is sometimes a responsible decision. Thus, it is now possible to obtain loans and to use credit financing programs, even after having declared bankruptcy. No exception to this rule, the automotive world is a great example of the ability to apply for a car loan to rebuild your credit.
When attempting to obtain a car loan after bankruptcy, the first thing to do is to find a lender who will work with someone in this financial situation. Some of these lenders may extend you a loan immediately after bankruptcy, offering promotional rates that often range from 10.99% to 13.99%. However, to access this loan, the purchase amount must be more than $10,000. Other lenders may prefer to wait for a duration between bankruptcy and the new loan. This period generally lasts between three and six months depending on each particular situation, and the promotional rates are set between 12.99% and 21.99%.
The second thing to do is to evaluate all the offers that have been offered to you by the lenders so that you can make an informed choice according to your financial situation. You might even contact your automotive dealership to find out if they might offer you direct financing, which can include both positives and negatives depending on each situation. In other words, it is important to educate yourself about all the possible options since, even though you have declared bankruptcy, you could very well find a competitive interest rate in the market. The first loan offered to you is likely not to be the best available, so you will need to learn if other financial institutions might come back to you with a more reasonable offer.
The third thing to keep in mind is the need to be realistic in your requests and expectations. You have just gone through a bankruptcy. Even if the interest rate on the loan seems high to you, it is quite likely that the majority of the offers exceed your expectations. Bankruptcy is seen as a risk factor by financial institutions, so, normally, their bids are higher than those given to people who have not been through a bankruptcy. Your goal will therefore be to avoid any financial turmoil for the next few years if you want to be successful in achieving better interest rates in the future. For example: Rather than buying the hottest car of the year with your loan, choose a reliable vehicle that is priced no higher than $10,000 instead. Furthermore, if you can include a down payment for your chosen car, the lender will recognize that you take their loan seriously and are determined to make responsible financial choices in the future.
In short, when you are trying to get a car loan after bankruptcy, you’ll get the best results after taking the time to educate yourself before making decisions and evaluate all possible offers. The most important thing, however, is to remember that there is always a way out of your precarious financial situation and obtain a loan, even if it seems impossible.
