Car Loan After Bankruptcy: How Long Should You Wait?

Taking out a car loan after bankruptcy may not be that easy. In fact, the time since you have filed for bankruptcy is an important factor when applying for this type of loan. Experts say that you need about two years before you should attempt a car loan. But, you do not need to wait that long, especially since car loans can help you rebuild your credit rating. Fortunately, there is a way to speed up the process. Here is a list of things that you can do to get approved in as fast as six months.

Know what Car is More Practical

Should you require a car loan after a bankruptcy, a practical car should be your option.  Practicality, more than style, should guide your decision-making process when shopping for a car. If you plan your car purchase well, you will also be able to plan the right loan package.  Remember to choose an affordable car loan, one where you can afford the monthly payment terms and charges.

Check your Credit Rating

As with any other loan, you need a good credit rating for a good loan.  The better rating, the better the loan.  However, a recent bankruptcy filing can greatly reduce your credit score.  There are a few things you can do to offset a bad score: First, write an affidavit to explain why you suffered bankruptcy. If a lender can recognize that your bankruptcy was caused by extenuating factors, or factors beyond your control, they will be more apt give you a better car loan, with better terms.  Second, get more credit and pay it on time.   The new credit record will begin to build and show your new payment patterns.

Get the Services of a Car Loan Lender

Car loan lenders specialize in finding the best type of car loan for the individual borrower. These lenders work with other financial institutions that, in turn, provide loans for those who have filed for bankruptcy. While the type of loan that you can get will largely depend on your ability to pay and how long have you filed for bankruptcy, car lenders can assist you in finding the right deal for your specific financial situation.

Secure your Car Loan after Bankruptcy

Car loans for people with bad credit can come either as unsecured or secured. With a secured car loan, you have to provide collateral such as your business or personal assets. When you provide collateral, your loan application is stronger because it is accompanied with the security of the collateral provided.  You will have a better and faster way of securing a car loan when you provide collateral.

In the end, focus on the fact that your car loan can help you prove that you are ready to rebuild your bad credit report. Just make sure that you can handle and payoff your car loan after bankruptcy and you will be on your way for a higher credit rating.

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