How Long to Wait After Bankruptcy to Get a Car Loan Approved

Sep 1
17:15

2011

Lara Sawyer

Lara Sawyer

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Getting a car loan after having declared bankruptcy is not impossible. Getting a loan can even assuage the effects of declaring bankruptcy.

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Indeed,How Long to Wait After Bankruptcy to Get a Car Loan Approved Articles bankruptcy does do quite a bit of harm to your credit scores and your credit history. Most lenders use the three-digit number to gauge the likelihood of you repaying any loan they might offer you. But a bankruptcy shadow is not everlasting.Lighten UpTrue, it can remain on your credit history for up to ten years. But it can be dispelled by the sunshine of your adopting responsible credit habits, paying your bills on time, using only a small portion of your available credit, and not applying for too much credit at once. All this will put you in a more positive light even though the bad mark lingers.Go Ahead and Try for a Car LoanTaking a car loan after bankruptcy is not an impossibility. Actually, getting a car loan after bankruptcy can do a lot to polish your credit image. It can get you started toward rebuilding your credibility. It could become a problem, a way to get into more high-interest debt problems. But it could be worth the effort.Easier Said Than Played OutGetting a loan right after bankruptcy is not an easy row to hoe. The time since you declared bankruptcy before getting a car loan is somewhat important. Most financial experts agree that two years should be the minimum. That is not a fast rule. If you can show your responsibility and prove to be a good borrower, six months is a good enough length of time.Be PreparedEven after waiting six months, be prepared to pay a higher interest rate. After shopping around and not being able to find a decent interest rate, you might want to consider waiting a bit longer. In the meantime you can build your credit scores so you can find an interest rate that is acceptable. You are still a risky customer to many lenders. Of course, to offset the risk, you could offer collateral such as real estate. This would make lenders more eager to lend to you while affording you more reasonable rates.Be PracticalTo assist your efforts in landing a car loan just after six months have transpired, decide that this is not the time to go shopping for your dream car. Settle for something quite practical and very affordable. Avail yourself of an online car payment calculator. Use it to ascertain an affordable price for you in terms of interest, monthly payments, and down payment.Your Credit ScoreIt is always a good idea to check your credit score in spite of your bankruptcy. It will let you know exactly where you stand in the eyes of creditors. It may be prudent to write a letter of explanation of why your suffered a bankruptcy. This will save you time when you apply for loans.Look to the FutureEventually, you will come across a lender who will be willing to extend you credit at a decent rate with payments you can afford. Be sure to meet your obligations to that lender. You do not need more bad spots on your credit history. Doing so will afford you better rates in the future and even ultimately having the wherewithal to get your dream car.