Auto Loans, Bankruptcy and What it Takes to Qualify

Bankruptcy proceedings significantly lower your credit score, making an auto loan after bankruptcy expensive and difficult to find. However, obtaining an auto loan after you go through bankruptcy is one of the best ways to rebuild your credit.

Most auto loan lenders will offer loans to individuals who filed either Chapter 7 or Chapter 13. If your bankruptcy was dismissed, though, you may not qualify. In order to qualify for a loan, you should meet the following criteria:

  • Proof of income usually meeting a minimum determined by the lender;
  • Only one bankruptcy; after multiple bankruptcies, your eligibility will change;
  • For open bankruptcies, you may be required to go through the court in order to get the
  • "Authorization to Incur Debt" or you have filled other requirements.

To increase your chances of securing a loan, be proactive. Do not try to hide or disregard your bankruptcy because a lender will find it. Address the situation before the lender needs to ask about it. Consider providing a statement regarding the circumstances that lead to your bankruptcy to the lender.

 


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