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Car Loans After Bankruptcy - Tips to Getting Approved
A car loans after a bankruptcy
is one way to help build back your credit history. In
fact, once your bankruptcy closes, you can apply for
a car loan the next day. To get approved with the best
rates for your car loan, follow these tips.
Review Your Credit Report
Before you start applying
for a car loan, check out your credit report and make
sure all your accounts are in order. It is not uncommon
after a bankruptcy to see open accounts that should be
closed, which hurt your credit rating.
While looking at your credit
report, consider adding a page explaining the situation
that resulted in your bankruptcy. If there were extenuating
circumstances, lenders may approve you for a better rate
than under normal conditions.
Plan Your Car Purchase
Before purchasing a vehicle,
decide what you can afford in a monthly car loan payment.
This will help you decide which financing package is
best for you. Both the loan amount and length of payments
will determine your monthly payments, so there is flexibility
in determining which vehicle you can afford to purchase.
Use A Car Loan Lender
Car loan lenders make their
money by finding you a loan. Car loan lenders work with
several financing partners to back loans with all types
of credit risk, including bankruptcies.
Online car loan lenders
deal with thousands of loans, and can usually find you
a better deal than your local car dealerships. Online
car loan lenders will send you a check when you are approved,
basically making you a pre-approved car loan buyer.
Explain Your Situation
Car loan applications will
ask if you have ever declared bankruptcy and why. This
is your chance to explain what led up to the situation
and what steps you have taken to resolve your credit
situation. Be sure to include improvements in your financial
history too.
Consider Refinancing
Once you are approved for
a car loan, keep your eye on future refinancing. By making
regular payments on all your bills, in a year’s time
you could qualify for significantly lower interest rates.
In three years, you can build your credit score to near
excellent and qualify for even lower rates.
Here are our recommended sources for auto or vehicle lenders online:
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