Posts Tagged ‘loan after bankruptcy’

Your 6-Month Formula to Obtain a Car Loan after Bankruptcy

Many people have the assumption that it is impossible to obtain loan after bankruptcy, which is not true. Be it car loan, personal loan, home loan, or even student loan, there are ways to qualify for the same provided you follow the right approach. Banks and lending institutions usually hesitate to lend money to those who have been declared as bankrupt. Lenders usually approves only those applications that have come from people with a not-so-bad credit score. Since people with bankruptcy records have seriously damaged credit scores, they have to work hard to find a lender who agrees to finance their new car. The good news is that there are several ways still available out there that can help you qualify for a car loan. Following is a brief rundown on some of the steps that you need to follow in this regard.

Review Your Credit Report

You already have a bad FICO score; you cannot afford a worse situation, especially when you are not at fault. Mistakes and errors in credit report may show a more horrible picture than it really is. So, before you find a lender and apply for car loan after bankruptcy, you should first review your credit history report thoroughly in order to make sure that the information provided in it is completely correct. If you find some errors, follow the necessary procedure to get the same corrected as soon as possible. Correcting those errors will help you improve your FICO score to some extent.

Get a Checking Account

Banks and financial initiations that offer car loans require the applicant to have a checking bank account in his/her name. Therefore, if your old bank account was closed during the bankruptcy process, you should go ahead and get a new account opened. Once you have this account, wait for 6 periods; during this period, you should indulge in financial activities that should build an impressive credit history for you. Most lenders look into the financial activities of the applicants within the last 6 months,. So, if you have a good financial history, it will be a big plus point for you, which will enable you to qualify for a favorable auto loan after bankruptcy.

Contact a Lending Institution that is a Part of a Large Network

If you want to improve your chances of getting your loan application approved, you are strongly recommended to contact only those financial institutions that are a part of a large network. Small lenders usually do not take risks by lending money to bankrupt people. Short list at least 10-12 such lenders and then request a free, no-obligation quote from them. The chances are that 5-6 lenders will reject your application while the remaining others will show interest in financing your vehicle.

Employment Stability

If you have a stable employment record with good amount of regular monthly income, you will not have to work hard to convince the lender to approve your loan application. Do not forget to attach your salary pay slips for the last 2-3 months along with your application.

If nothing else works, you can always qualify easily for an auto loan after bankruptcy if you could get a family member or a close relative who is ready to be the co-signer of the loan. In such cases, the co-signer will also be liable for the repayment in case you start making defaults. So, if you have someone who trusts you and have full confidence in you that you will never make defaults, you may convince him/her to cosign the loan.

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