Obtaining a car loan after bankruptcy is an uphill task but it can be done thanks to the numerous car loan choices today. A number of firms nowadays provide flexible terms when it comes to auto loans, which is very helpful to individuals who have had financial problems in the past. Organizations now offer secured car loans to individuals with bad credit history. This gives the lender the assurance that the money will definitely be paid off.
In the contemporary world, you can even get an automobile loan online. Finding a lender online is not as hard as getting credit from banks or other established financial institutions. Discussed below are some of the ways you can obtain an auto loan after bankruptcy.
Fine Tune Your Credit Report
Before applying for the loan, it’s important that you first dress up your credit report. To do this, you can add comments to the credit report explaining in details any extenuating situations that made you file the bankruptcy proceeding. Additionally to add zest to your damaged credit file, get a secured credit card. Secured credit cards are usually available and irrespective of your credit rating you can get these types of cards. In order to get a secured credit card, you are required to put a deposit that is equal to the amount of credit you wish to be extended to you from the credit card issuer.
Once you have the secured credit card, ensure that you don’t use more than one-third of the amount of the available credit at any one time. Have a small balance in your account each month. This will go a long way in adding to your credit score since these card companies usually give a report monthly to the credit bureaus.
Establish an Affordable Payment
Have a budget and establish the amount you can afford in terms of the car loan repayment. Determine the period you want to pay the loan for your new car. The total purchase price of the vehicle you choose and the length of the repayment period will determine the monthly installments you will be making to the lender. The longer the repayment period, the lesser the monthly payments you will have to part with and vice versa.
Never agree to a repayment plan that cannot fit into your budget. Agreeing to payment terms that don’t fit your budget will only worsen your credit rating. This is because you may be forced by circumstances to skip some installments which will just get you back into the same financial situation you were before.
Be Realistic
When scouting for car loan after bankruptcy, you should be realistic in the choice of car you choose to buy. There is no bank or any financial institution that is going to offer you an auto loan of $100,000 after bankruptcy. Go for a car that will serve basic purposes and after you have worked on your finances you can opt to upgrade the make of your car.
One of the easiest ways of getting a good vehicle at wallet friendly rates is to go online. There is a wealth of valuable information on the internet. There are numerous sites that you can browse to get a vehicle that will serve your specific needs yet at affordable rates. With online shopping, you don’t have to leave the comfort of your home and it also saves you valuable time.
Shop for the Best Deal
Once you have established the amount of cash you want to borrow and the kind of vehicle you wish to buy, start shopping for the automobile loan. If you are looking for online lenders, you will need to browse for firms and individuals who avail car loan to people without considering their credit history but use other parameters to decide whether they will give the credit facility or not. Once you have established a lender, fill out an application form and submit it over a secure server. With online lenders, you can receive the money within 48 hours directly to your account or to the account of the automobile dealer you have chosen to make your purchase from.
It is very important that you make the agreed payments on time to your lender so that you can start rebuilding your credit score. Make repayments without delay will definitely add valuable points to your credit score.
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