This post talks about ways to get approved for a car loan after you are over from your recent bankruptcy. Enjoy the post from Bill Tsouvalas!
Acquiring car loans after bankruptcy is frequently considered impossible. However, that assumption is wrong. You can still obtain a car loan if you filed for bankruptcy and subsequently been cleared of your debts.
Do you qualify for a car loan?
If you have been cleared of bankruptcy and you are looking to purchase a car, auto loan brokers can prove to be invaluable. Loan brokers have a lot of knowledge on how to go about with helping people with bankruptcies. Furthermore, they know multiple lenders that specialize in providing financing to persons with bankruptcy history.
If you take your time, to research on how to find a loan for motor vehicles, it should not be too troublesome even with a prior bankruptcy history. Pick at least three lenders whom you can bargain with on the loans and then compare the best rates and conditions.
You can use web searches but it is best to meet with potential lenders in person.
How to Find a Car after Being Discharged of Bankruptcy
Acquiring a bank auto loan after a bankruptcy discharge is achievable. Nowadays, banks have experienced these situations more often what with the economic slump, and unemployment rates being so high.
Ten years ago, it may have been difficult to get a bank car loan after bankruptcy, but today it is much easier. What you need to know:
1.Compare Rates Online
The easiest approach to find a bank car loan with a discharged bankruptcy record is to go online. There are many sites dedicated to submitting your information online.
These sites are good because you fill in your information once and the site distributes your details to different banks.
This allows banks to compete for your business. It, therefore, saves you time from making phone calls or numerous visits to local banks.
2. Expect Higher Rates
with a bankruptcy past record, you are targeted as a high-risk customer to the banks. The rates you pay for a bankruptcy range from 15 to 20 percent, which is higher than the average loan rate. However, banks do offer lower rates even for bankruptcy cases if they have had a previously good relationship with you.
The rates will still be slightly higher, but borrowing from a bank you have good relations with saves you some money because the interest rates will not be too high compared to other commercial lending institutions
3. Be Realistic with Your Car Choice
A bank is not going to offer you a highly priced vehicle loan after bankruptcy. Your financial borrowing ability ranges from $10,000-$15,000. You may not get the fancy car you were hoping for; the recommended price range will get you a durable car that will serve its intended functions.
After a few years, you can consider trading in your car for something better and as time goes by, after proving to the bank that you are capable of paying off your debts, getting the car of your dreams can become a reality.
4. Expect to Put More Down Payments
the more money you have to put as a down payment on your car, the higher the chances are of getting a bank loan. This shows the bank that you are serious about your investment. The bank will have more faith in you and regard this gesture as proof of the ability to handle the loan installments.
A 20% down payment is enough to get your car loan approved.
About the Author: Bill Tsouvalas is the founder and managing director at Savvy Finance. He has been working in the vehicle & asset finance business for over 8 years. Join the discussion with Bill on Google+.