Auto Loans For Bankruptcy Victims

If you are having financial problems but need a new car, you should examine auto loans specifically designed for people in bankruptcy. Essentially, a bankruptcy auto loan is a secured loan, meaning it is backed by collateral, namely your car. So, in the unfortunate event that you are unable to meet your monthly loan payments on time, the lender will have to repossess your car.

Make Bankruptcy Auto Loans Easy for You

You might as well face it:Filing for bankruptcy puts you on the list of high-risk borrowers. That means banks and other lending institutions will not be too open to the idea of extending you an auto loan. Nevertheless, you can make things easier for you if, before you apply for a car loan, you wait for about two to three years after you have filed for bankruptcy. You can use this time to reestablish good financial standing.

If you cannot wait for years, you can always try other after-bankruptcy auto loans that charge higher interest rates. You will be pay more, but at least you get to buy a car early on. At any rate, you can always lighten the burden by giving higher down payment.

Boost Your Chances with a Cosigner

To hasten the approval of auto loans for bankruptcy, borrowers can opt to have a cosignatory in their loan applications. If you choose to have a cosigner, make sure that he has a good credit rating so that you qualify for good loan rates. Your cosignatory’s credit score will also directly influence the lender’s decision to grant you the loan. After all, the lender can run after your cosigner if you default on your loan payments.

Get Lower Rates by Pledging More Collaterals

If you want to get lower rates on auto loans for bankruptcy, you can add more collaterals or securities to your loans aside from the car itself. Using collateral means pledging a business or personal asset as security for the lender in case you defaulted on your loans.

The Need for Timely Repayment

Remember, just because you have filed for bankruptcy or you are in a deep financial trouble does not mean that you do not have to pay for your car loan. On the contrary, if you take out an auto loan after bankruptcy, you need to make sure that you are making prompt monthly payments to your loan because it can help you rebuild your tarnished credit rating.  After all, you really need to pay for your loan if you want to keep your car.

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