You have just gone through bankruptcy and you find out that your old car has completely broken down and you have no other choice but to replace it. You may be surprised to learn that many individuals that go through bankruptcy apply for an auto loan or a car refinance loan to rebuild their credit. Yes, it is possible to find new car loan after bankruptcy. There are many auto lender that offer car loans for people with bad credit and bankruptcy and we will provide you with useful tips to show you the best way of going about it.
Why Getting an Auto Loan Can Fix Your Credit
Going through bankruptcy is physically and emotionally exhausting and painful. However, it is not the end and you can certainly get back on your feet again by taking proper steps to rebuild your credit. One of the best ways of building your credit is to acquire an instalment loan that you pay off each month. Auto loans are one such instalment loans that you can use toward purchasing a car and rebuilding your credit at the same time. If you follow through with these plans, you will be able to boost your credit so that in the future you can get more attractive financing.
Clean Up Loose Ends Before You Apply
Before you rush to get an auto loan after bankruptcy, you need to ensure that all your discharged debts and dues have been clearly listed on your credit report. After all, the last thing a lender wants to see on your credit report is an outstanding charge. Thus, get a free copy of your credit report (You can learn more about how to get your free credit report by visiting this link) and read through it carefully. If you notice any errors, report it to the credit bureaus immediately so that they can update their information.
Who Would Offer Auto Loans after Bankruptcy
There is a tough market out there and we are also in a middle of global economic crisis and consequently many people are having financial trouble. Although your local bank would most likely turn you down, there are many lenders that provide car loans for people with bad credit and bankruptcy. If you have a steady employment and can prove that you are able to afford the payment, these lenders will work to secure you the loan you need.
Shop Smart – Get Pre-Approved First
The smartest way of shopping for your car after going through such financial hardship is to meet with an auto lender to find out what you can afford and how much they will approve you for. Once you get your pre-approval then you know how much you can afford and the dealer will treat you like a VIP client. Without the preapproval, you may not be able to bargain as affectively since there is much uncertainty about your purchase power whereas with a pre-approval the car dealer feels that you are a serious and sure buyer.
Where to Get Auto Loans After Bankruptcy
You certainly should not get your loan through the car dealer as they do not specialize in this area and will not be able to offer you as good of an interest rate as an auto lender. Do not just approach any car lender; you need to look for auto lenders that also specialize in offering auto loans to people with bad credit and bankruptcy. If you follow these steps and pay your instalment loan on time, you will start to rebuild your credit and say goodbye to your old bankruptcy.