Car Loans After Bankruptcy

Vehicle loans are one of the most popular loan types in the country, and for good reason. To make a living, most people require reliable transportation. One of the main concerns of people who file Chapter 7 bankruptcy is whether or not they will be able to get a car loan once they have done so. While you must wait at least until you receive your Chapter 7 discharge, which usually occurs 60 days after your 341 hearing of creditors, you can then begin applying for auto loan.

Can I Get A Loan After Bankruptcy?

Yes, you can get an auto loan soon after being freed from Chapter 7 bankruptcy, but finding a suitable lender may take some time. You should anticipate paying substantially higher interest rates. Chapter 7 bankruptcy can stay on your credit report for up to ten years after you file it. Furthermore, if you had good credit prior to bankruptcy, your credit score is likely to have suffered when you experienced problems with too much and/or delinquent debt. You’ll need to find a lender ready to work with “poor or no credit lending” standards because of these two factors. Individuals designated high-risk borrowers are charged a higher interest rate by these types of lenders.

Do I Need Good Credit?

Generally speaking, you do not need perfect credit. Beginning to repair your credit after bankruptcy is an important step toward obtaining a car loan. If you have any secured property payments (such as another vehicle or a home loan) left after bankruptcy, making these payments on time provides you an advantage in reestablishing your credit. Furthermore, if you qualify for a secured credit card, you can use it to make little purchases and pay off your monthly balance on schedule. These activities will allow you to begin building credit almost quickly, as well as demonstrate to your potential auto loan lender that you have regained control of your finances following a Sacramento bankruptcy.