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Car Loans after Bankruptcy

Do Car Loans After Bankruptcy Really Exist?

If you have a past bankruptcy, getting approved for an auto loan can be difficult. Although it might seem hopeless, it is possible to find an auto loan after filing bankruptcy. There are many lenders who specialize in handling subprime auto loans and they all evaluate what constitutes risk differently. Hence, one lender may offer you a loan that another lender has already denied. If your bankruptcy is recent, applying for a bankruptcy auto loan online, rather than at a large bank, will save you time and frustration.

Car Loans in Active Bankruptcy

Although it might be hard to believe, it is not uncommon for consumers to be approved for a car loan even while still in active bankruptcy proceedings. Especially in the case of a chapter 13 Bankruptcy which generally will take much longer to resolve. “It’s really not hard to get new debt, particularly if you need it,” says Henry Hildebrand III, a Chapter 13 bankruptcy trustee in Nashville, Tennessee. Although getting a car loan while still in bankruptcy is possible, it’s not ideal. The longer it has been since the bankruptcy was finalized the easier you will find it to get a reasonable car loan.

Other Car Financing Options

Buy Here Pay Here Financing is another viable option but should be utilized as a last resort. Assuming multiple dealers and lenders have denied you, an In-House Financing Dealer will usually take the risk but taking on that risk will come at a price. Another thing to consider is that most Buy Here Pay Here dealers don’t report your payment history to the credit bureaus which could extend the time it takes to rebuild your credit.

Have Realistic Expectations

Don’t think too big when car shopping after a recent bankruptcy. Most lenders have a fairly low cap on loans to individuals with bad credit, so aim for something reliable that will get you where you need to go, regardless of style. Once your credit is built back up, you’ll be able to refinance into a better, more stylish vehicle.

Think of this time as a rebuilding period. Start small and work your way back up to being able to get a larger auto loan at a better interest rate. Once you show the lenders that you are reliable and can handle a small loan, you will increase the chances of obtaining a better loan in the future. Finding an auto loan after experiencing a bankruptcy can be challenging, but it is possible with Freedom Auto Financing. Apply Now!

July 18, 2014