Thursday, January 14, 2010

How to get the Best Auto Loans after Bankruptcy

Losing Everything

Bankruptcy does not mean that all is lost, even if you think it is. Proper planning may have prevented this mess you are in, regardless of the events that led up this. There are other opportunities to get back in financial shape after filing for bankruptcy. A car loan may be the thing to fix your credit score and get a lower interest rate after you file bankruptcy. If you do it the right way, you will be sailing in no time.

Credit Scores

If you have decided to go ahead with the auto loan, the first thing you should do is review your credit scores, and make sure your accounts are in order. Filing bankruptcy does raise your credit score, but only if all accounts are closed. You can have your scores adjusted by establishing contact with your creditors of these accounts and get the credit report corrected. Reasons behind your bankruptcy may need some explaining when you apply for an auto loan. If you faced extreme circumstances, lenders may even consider you for a lower rate loan. You may find it easier to get approved in the end, even if you do not get lower rates offered.

Affordability Issues

Before applying for an auto loan, you will need to assess whether you can really afford to take on more debt. Your credit score will not be fixed if you take out another loan you cannot afford. This will only make your problems worse. Reviewing your budget thoroughly will help you determine how much money you can spend on an auto loan. After making a decision, you will know how much you can afford each month.

Suitable Services

Even if you have filed for bankruptcy, there may be a few lenders who will still give you an auto loan. You can make applications online, as well as find a number of lenders who offer these types of loans. They can offer you better deals that what your local dealer can give you. The comfort of home is where all this can take place.

Explain Your Situation

Most car loan applications will ask you whether you had filed for bankruptcy. You must answer this question truthfully, as well as give a true explanation about your circumstances, because it may help your cause. Make sure that you keep up with the payments and not get behind, after you have been approved for the loan. Financially getting back on track after a bankruptcy is to create a good payment record.

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