DRIVING AWAY FROM YOUR BANKRUPTCY WITH A NEW CAR LOAN
One thing is for certain, bankruptcy
is a brutal beast when it comes to your credit file. But getting a car loan after bankruptcy
is one of the best ways to begin the rebuilding process to regain your
borrowing reputation and qualify for other loans. In
fact, once your bankruptcy has been discharged, you can pretty much
apply almost immediately for a car loan. Let us take a look at what you
can do to get the best rates on your post bankruptcy car loan.
Checking Your Credit
Report And Score
Before you run to the car dealership, you should always check your
credit report to make certain that all of your accounts are noted as
discharged in bankruptcy. Oftentimes, your credit report following
bankruptcy will still show open accounts when they should be noted as
closed and discharged, which does harm to your credit rating. And since
different car dealerships use different credit bureaus when they
inquire about your credit, be certain that you contact all three major
credit reporting bureaus to determine the accuracy of your credit file
(Experian, Trans Union, and Equifax).
If your bankruptcy and accounts are not noted
accurately, contact the bureau in question immediately to request that
they update your record. In addition, you should add a page onto your
credit file that explains why you ended up in bankruptcy in the first
place so that potential creditors get a better picture of your
circumstances when filing. This is especially true if extenuating
circumstances forced you to file bankruptcy, such as job loss,
accident, illness, injury, and other reasons that led to your
particular situation.
Making A Budget For
Your Car Purchase
That being done, you should also make out a reasonable budget for the
vehicle that you wish to purchase, and determine how much you can truly
afford to pay each month by way of a car payment. Keep in mind that the
length of the loan and the amount of the loan will be big determinants
in your payment amount, so decide before going to the dealership how
long you want to pay for your car and how much you can afford to pay.
Choosing A Lender
In addition, you should determine who will finance
your car loan. There are options such as dealer financing, banks,
finance companies, or even online car loan servicers. Research which of
these can give you the best deal, and do not feel pressured to go with
dealer financing either. Oftentimes, dealerships are given great
incentives for sending loan applications through to larger finance
companies. By going to the finance company yourself, you cut out the
middle man, which can only save you money.
Refinance As Soon As
Possible
Your car loan following bankruptcy discharge will undoubtedly be
written at a much higher rate than a normal borrower would pay. For
this reason, it is important that after a year or so of good payment
history, you attempt to arrange to refinance your car loan. This can
save you literally thousands of dollars over the life of your loan, and
lenders will often refinance your loan when you have demonstrated
responsible payment behavior.
About the Author: Amanda Hash is an expert financial consultant who specializes in helping people to recover their credit and get approved for home loans, car loans, personal unsecured loans, unsecured credit cards, refinance home loans, consolidation loans, student loans and other financial products. If you want to learn more on how to get approved for Bad Credit Loans and Unsecured Loans just visit http://www.yourloanservices.com/ and you'll find all the information you need.