Auto Loans After Bankruptcy - Getting Approved With Bad Credit
Bouncing back after a recent bankruptcy is challenging, but
possible. To begin with, you will need to rebuild credit, which
involves opening new accounts. If you need a new vehicle,
financing a car following a bankruptcy may be a smart move. Auto
loans are easy to qualify for. Thus, you can get approved with
horrible credit.
How to Avoid High Interest Rates?
If your bankruptcy was recently discharged, high interest rates
may be unavoidable. Yet, there are ways to purchase a new car
without paying several percentage points above the current
average. Sadly, there are some people paying interest rates 18%
or more.
To avoid high fees, postpone financing a new or used vehicle.
Instead, attempt to get a secured credit card. Make timely
payment for about a year. In time, your credit score will
improve, making it possible to obtain an auto loan with a rate
of 9 or 10 percent.
Choose a Used Vehicle to Finance
If you are hoping to improve credit by financing a vehicle, opt
to finance a small amount. Thus, even with a high interest rate,
you can receive affordable payments. Another tactic involves
taking charge of the car buying process. Instead of allowing the
dealership to determine monthly payments and loan term, inform
the dealership of how much you are willing to pay. Your ideal
monthly payment should include finance fees.
Use a Subprime Auto Loan Lender
After a bankruptcy, subprime lenders are helpful with helping
people secure auto loan financing. Some lenders are shady. On
the other hand, a large number of lenders understand your
circumstances and attempt to offer affordable solutions. If
using an auto loan broker, you have the opportunity to receive
various quotes from different subprime lenders. This is ideal
for making comparisons and choosing the best loan.
Apply for Loan with a Co-signer
If you are hoping to obtain an auto loan with a low interest
rate, it may help to apply for the loan using a co-signer.
Co-signers or co-borrowers become responsible for the loan if
you are unable to pay. If your co-signer has exceptional credit,
you may qualify for a low interest rate on your auto loan.