How To Get Car Loans After Bankruptcy: Secrets To Convincing The Lender

Once upon a time, being declared bankrupt was something of a disaster for people. The ramifications were severe, with many lenders preferring to steer clear of such applicants – certainly when bankruptcy was less than 2 years earlier. But times have changed, and the stigma is no longer there. So, when a new car is needed, getting a car loan after bankruptcy is not necessarily a problem.It would be foolish to think that the terms available would be very good, but there is a relief felt by those bankruptees eager to address their poor credit status. The only way to recover is to take on a loan and repay it without a hitch. So, getting loan approval despite bankruptcy is important to them.The key issue for lenders, however, is whether they will get their money back. To convince them that that will be the case, it is important to view the application from their perspective. Once that is done, putting together a car loan application strong enough to be approved is easier.The Issue Is Not Bad CreditThe first fact to learn is that the key issues related to any loan application do not include the credit score. In fact, scores have practically no influence over an approval process. What really matters are current income and job security. So, getting a car loan after bankruptcy is not so difficult if the applicant satisfies these conditions.Income is an obvious condition to securing any loan approval but when it comes to seeking loan approval despite bankruptcy, it is employment security that matters more. This is why self-employed applicants find it much more difficult to shake off the issue of bankruptcy. However, if the loan is affordable, then approval is always possible.Bad credit scores really only affect the interest rate that is charged on the loan, with very low scores usually meaning very high interest. To that extent, the scores can influence the affordability of a car loan, but it is likely that a limited income would have decided that anyway.Affordability Is The Principal ConcernSo, how can a loan be assured of being seen as affordable? Well, there are some factors that can strongly influence this, and thus help in securing a car loan after bankruptcy. Of course, finding loan deals that have low interest rates and good terms helps, and online lenders tend to provide these even to bad credit borrowers.Getting loan approval despite bankruptcy is more likely from online lenders because they are recognized experts in lending to that niche. However, it is the terms that matter most, and the fact that they usually offer longer repayment periods plays a big part in establishing affordability.If a $15,000 car loan is needed, for example, a term as long as 10 years may be offered. This means the monthly repayment would be $135. The same loan repaid over 5 years would be twice that. However, the one drawback is that more interest is paid over the lifetime of the loan.Other Factors To ConsiderThere are some other issues that should be considered when applying for car loans after bankruptcy, and which can make approval more likely. Getting a cosigner, for example, means that the perceived risk involved for the lender is reduced dramatically.A cosigner basically guarantees that monthly repayments will be made, even if the borrower is unable to make them. This means the chance of default is practically nil, thus making approval despite bankruptcy very likely.Another option to consider is to make a down payment to reduce the size of the required loan. Some dealers recommend this payment anyway, but in fact it is never required to be made. However, to make the car loan affordable, a payment can be effective.