There is a common misconception that it is impossible to get a car loan after bankruptcy. However, this misconception is false. The reality is that most lawyers or trustees recommend you start rebuilding your credit as soon as possible. Because getting a car loan is one of the fastest ways to rebuild your credit, getting a car loan is an ideal way to reestablish your credit after bankruptcy. Here are some tips to help you get a car loan after filing for bankruptcy:
It is important to manage your expectations when you get a car loan after filing for bankruptcy. While getting the loan is not impossible, it is likely you will pay a little more for your vehicle. Bankruptcy may be viewed as somewhat risky to lenders, and so the cost of the loan (interest rate) and the cost of the actual vehicle is likely to be higher than if you had a perfect score and a history of paying on time.
When rebuilding your credit following a bankruptcy, It is important to ensure you can afford a financed car. You do not want to end up in a situation where you cannot afford to pay your bills. Figure out where in your budget the money is going to come from, and once you do get approved and into a new car, ensure you make your payments on time and in full.
It is important to be realistic and understand that your loan terms will not be as favorable when you apply for a loan after bankruptcy. This is because lenders see you as a riskier candidate to take on.
Taking on a car loan post-bankruptcy is one of the fastest ways to rebuild your credit after bankruptcy. If you make timely payments, you will see your credit improve drastically and have an opportunity to refinance under more favorable terms after a few short years. In most cases, being able to establish a positive rating and payment history can be accomplished in as short a time as one year. Banks and finance companies typically give strong consideration to this when considering you for a new, lower rate loan in the future.
BC Auto Credit is located in Burnaby, British Columbia and also serves Vancouver, Victoria, Kelowna, Kamloops, Prince George, Chilliwack, Vernon, Penticton, Nelson and surrounding areas.
