Obtaining a car loan after bankruptcy can be less difficult if you bear in mind certain things and follow proper guidelines to get the loan. Since there are several companies that offer flexible payment options on auto loans, you can shop around for the best available rate on your car loan despite your poor credit rating.
Bankruptcy
The two types of personal bankruptcy you may file for include, Chapter 13 and Chapter 7. If you file for Chapter 13 bankruptcy and decide to purchase a car, you will have to obtain permission from the trustee assigned to handle your bankruptcy. The role of your trustee is to handle your financial position by calculating your debts. The trustee will evaluate the repercussions of taking a car loan on your payments towards pre-existing debts. Apart from the auto loan, there are additional payments such as taxes, fees and insurance that should be budgeted into your total expenditure on the car. If you have filed for Chapter 7 bankruptcy, you have to attend a 341 meeting before shopping for an auto loan.
Car Loan
Although you may have filed for chapter 13 or 7 bankruptcy, you will be able to get an auto loan from certain lenders. The rate of interest offered on the auto loan will be high, given your bad credit rating. In addition, the terms and conditions set for each individual in bankruptcy differ. Before researching various lenders, it’s advisable to review your current financial position to get a better understanding of your monthly payments.
Credit Report
Most lenders will ask for a higher rate of interest due to poor credit history. It’s best to review your credit report and close accounts that may still be open. Consider adding information about why you filed for bankruptcy. In some cases, an explanation may help you obtain a better interest rate.
Lenders
Before selecting any lender to finance your auto loan, you should meet lenders in person to obtain information on loans and interest rates. This will also give you the opportunity to explain why you filed for bankruptcy. Negotiate rates with different lenders and compare each lenders rates and terms. You may also choose to verify the reputation of any lender with the Better Business Bureau. Once you have several auto loan rates for your reference, work out your monthly payment to find out what type of vehicle you can afford. and afterBK websites.
