Availing Auto Loan after Bankruptcy Some Useful Tips
Bankruptcy is one of the worst phases that a person suffers during economic troubles. People who have become bankrupt may think it ‘impossible’ to arrange car finance but given certain tips and considerations one can buy a car on loan. However, it requires successful repayment of the previously availed loan so that the borrower’s credit history is shown in positive light. It may sound little bit weird but it is not at all ‘impossible’ affair to avail adequate ‘loan’ from a bank or financial institution while facing bankruptcy. The following points will help a bankrupt’s cause.
Check the credit report:
Reviewing credit report is a crucial aspect while processing an aspiring borrower’s car loan application. But even before making such application, make sure to thoroughly go through both the past credit history and present credit status. It will give you a fair idea about the outcome of your application. Keep it in mind that the credit report should display that you have closed all accounts and it will be of immense help if the report manages to project your stable income. Banks or financial institutions always form a positive notion about the intended borrower while considering the car loan application provided he/she discloses his/her stable income source.
Regular instalments and repayments:
Look towards the future and estimate the money outflow. There is no point in blindly going after your dream car when you cannot afford it after becoming a bankrupt. Draw a comprehensive plan so that you can identify your financial position. It will help you to understand whether you will be able to repay the borrowed money and pay the car loan EMI without any default. Remember that a single default may prompt the lender to possess your car. Paying timely instalment is a key. Try to put a tight leash around your expenditure and control your ‘car dream’. It is suggested to aim at a ‘used car’ in good working condition in case your economic doldrums does not allow you to own a brand new car. It will satisfy your desire without putting extra burden upon your economic condition.
Improved credit score is crucial:
This aspect more or less is like the earlier point. It is easy to guess that making timely payment is crucial after taking a car loan. If you make late payments occasionally then it will be surely reflected in your credit score thus placing you in a precarious condition. On the other hand timely repayment lowers down the credit score thus making the borrower a ‘positive customer’ in the eyes of the lender.
Weigh different options:
Get in touch with the finance manager at the preferred car dealership to get a fair idea about different post bankruptcy car finance structures. It often turns out that getting car finance from captive lenders (finance division of car manufacturers) is easier rather than the banks or financial institutions after declaring bankruptcy status.
Keep in mind that availing car loan after bankruptcy is not an impossible desire but the lease payments are higher. Always take care about the documentation process and make sure to submit all the required documents and information. Go through the terms and conditions thoroughly before signing the contract.