One thing people often think about after they file for bankruptcy is ” Can I get a Car Loan?” You may think a bankruptcy will ruin your chances of getting a car loan, but there are actually a number of lenders who will still be willing to work with you.Just because you file for bankruptcy, it doesn’t mean you shouldn’t be able to purchase a vehicle. Getting a car loan after a bankruptcy may be a little different, but it’s definitely possible.
How Soon After Your Bankruptcy Can You Get a Car Loan?
There’s no need to wait any amount of time after your bankruptcy before you can get a car loan. In fact, assuming you have the means to make the payments the sooner you can get a loan the better.
A bankruptcy will hurt your credit rating, and the only way to improve it is to take on new loans and pay them off. As long as you make your payments on time your credit rating will slowly start to increase.
There are plenty of lenders who are willing to work with people who have bad or no credit, so don’t get discouraged.
Figure Out How Much You Can Afford
When you’re buying a car after a bankruptcy you’ll need to be realistic about what you can afford. The interest rate of your loan will be higher than someone who has an average credit rating. You also won’t get approved for a more expensive vehicle, so you should start looking at cheaper used vehicles.
Experts say your car payment should be no more than 15% of your pre-tax monthly earnings. So, if you make $3000 a month your car payment should be less than $450.
What Kind of Car Loan Can You Get After a Bankruptcy?
The car loan you get after filing for bankruptcy will be mostly the same as any other car loan you’ve ever gotten. There will be some key differences though.
For starters, your loan will have a higher interest rate than standard loans. Keep in mind that lenders are taking a risk loaning money to you, so they supplement that risk by charging you a higher interest. As mentioned before though, if you pay your loan off on time and prove you can be trusted you will receive lower interest rates in the future.
Lenders will also require you to be employed in order to qualify for a loan, and you will need to earn a minimum of $2000 per month. This is to make sure you have the means to pay off the loan. The higher your monthly income the more money a lender might be willing to loan to you.
Terms generally range from 3-8 years. Longer loans might be tempting, as the monthly payment is lower. But you should remember that in the long run, an 8-year loan will cost you more than a shorter loan.
Get Pre-Approved for a Car Loan
Before you start car shopping it’s a good idea to get pre-approved for a loan first. This is especially true if you’ve recently filed for bankruptcy.
What you don’t want to happen is to go to a car dealership and pick out a vehicle, only to get turned down for financing because the car is out of your price range. By getting pre-approved for a loan first you’ll know exactly how much you can afford to spend on a car.
This will allow you to be more realistic about what kind of car you can buy and help you choose a car that you know is in your price range.
Where Can You Get a Bankruptcy Car Loan?
The first place you might think about going to get pre-approved for a car loan is a bank. However, that might not be the best choice.
First of all, banks generally don’t specialize in offering loans to people with poor credit. So, there’s a chance that you might get turned down. Banks also have the disadvantage of only being able to offer you their own rate. Other lenders might be willing to offer you a better rate, but a bank won’t be able to tell you that. In order get the best rate you’ll have to go to a number of different banks to find out what all of them are offering.
Your best bet is to go to a finance company. Many of these businesses specialize in helping people with bad or no credit secure car loans. They also have access to a number of different lenders, which means they can shop around for you and find the lowest rate possible.
Get a Pre-Approved at Auto Loan Services
Auto Loan Services is a finance company that’s goal is to help people secure the best car loan possible, no matter what their credit rating might be.
We have access to a wide range of lenders and will survey our many partners to find the lowest rate possible for you. If you have poor credit, or just filed for bankruptcy, we can pair you with a lender who specializes in helping people rebuild their credit. We can find you a loan that works for you and starts you on the path to improving your credit rating.
We can generally secure same day car loan approvals, so you can stop worrying about your loan and start shopping for your car.
Choose from Our Wide Selection of Vehicles
Through our partnerships with a variety of local dealerships, we also have access to an inventory of over 5000 vehicles. Once you’re approved for your loan you can start browsing and find the perfect car for you. We’ll even deliver it right to your door.
Best of all, if for any reason you’re unsatisfied with your vehicle you can return it within the first 30 days and exchange it for another one.
Don’t Let Bankruptcy Hold You Back
Are you interested in finding out what kind of car loan you qualify for? Call 1-866-70-LOANS to talk to one of our team members and get the process started.