Options for Auto Loans after Bankruptcy

Considerations When Applying for Your New Vehicle with Bad Credit after Bankruptcy

Borrowing money to purchase an automobile is one of the key things that most of us will have to consider at some point in our lives no matter what type of financial situation we may be in. Unfortunately, bankruptcy is a possibility for many people from all walks of life, especially in a period of economic downturn. Thankfully, bankruptcy auto loans exist, where lenders are willing to extend loans, but with a limit attached. With the increasing number of specialized creditors, obtaining an auto loan is not as hard as it used to be, though you will still have to face some challenges to be approved. For most car loan applicants who have gone through bankruptcy, any loan package is fine as long as it will give him/her the chance of rebuilding credit through the timely payment of a new and affordable loan package. A person’s credit score, one of the most important factors that most of the financial institutions look at, is an added advantage when one is looking for an auto loan from a lender. Due to this factor, it may be difficult to secure an auto loan (mostly if it is unsecured) after bankruptcy because this usually leaves your credit score in a very bad place.

Most lenders will decide to give you an auto loan after bankruptcy only after receiving some assets from you to act as collateral or security. In the auto industry, there are two types of creditors who offer great post-bankruptcy deals to individuals who are getting out of a bad financial situation or just have complete bankruptcy. 

The sub-prime lenders usually charge an interest rate that is often higher than the current lending rate because most of the risk is carried by the borrower. The hard money lender, on the other hand, charges a much higher interest rate than their sub-prime counterparts. They usually do not check the financial background of an individual and in most cases they may add some sort of collateral on top of the vehicle. 

Make sure that you do an extensive research before making your final decision so as to avoid dishonest dealers who inflate their car prices, request huge down payments and finance unfair interest rates on the balance. CarLoan.Expert specializes in providing bad credit auto loans to those with bankruptcy and other credit issues and also provides many resources online for applicants to research before they apply online for a bad credit auto loan.

In case you do not have a down payment available, you can consider having a cosigner to help bring you desirably lower auto loan rates. Make sure that the cosigner has a good credit score as this could help a great deal get low interest rates on your loan because the loan will be based on current credit score as well as their financial history. This makes the cosigner responsible for the loan in case you can no longer pay for the loan.

If you find it hard to obtain or acquire a brand new car, another viable option is to get a used car in the second hand auto market. Going for a used car will help reduce the principal loan amount that you will be required to pay, as well as the interest rates that you will be charged. Once you are stable financially, you can then sell the second hand vehicle and acquire a brand new one of your own choice. Any auto loan that has been secured after bankruptcy and also has a realistic payment agreement based on the income of an individual will be immensely helpful for a person’s financial recovery and also for building their credit rating. If you do secure a bankruptcy auto loan, just be sure to abide by all the conditions stipulated in the loan to avoid any extra obligations or hassles from the lender providing your bankruptcy auto loan.

If bankruptcy is preventing you from obtaining a vehicle, don’t hesitate - Apply Online today with the bad credit auto loan specialists at CarLoan.Expert to get approved in less than 60 seconds!

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