Once upon a time bankruptcy meant the end of your financial life. In the new economy, however, with the current state of the unemployment rate, financial institutions understand that bankruptcy is sometimes a responsible choice. Nowadays, finding a lender who would approve a car loan is no longer an insurmountable obstacle. Here are some details, tips and advice that can help you get a car loan if you try to rebuild your credit after a bankruptcy.

Choosing the right lender


  • First, you need to find a lender who is willing to work with bankrupt individuals. This is not as difficult as it was, but it is still worth doing your research and informing you about the lender that is the best choice for your particular situation.
  • You can consult with the dealer from whom you plan to buy your car to see if qualify for direct financing, but depending on your situation, it may be that what it offers you has more negative points than positives.
  • Find out what’s ahead before starting the process. Better to be prepared and avoid unpleasant surprises. Take advantage of your internet connection and look for lenders and interest rates in your area. Even with a bankruptcy on file, a competitive interest rate could wait for you.

Have reasonable expectations


  • Although your interest rate may be competitive, it is likely to be even higher than you expected. Recent changes in lenders’ attitudes toward bankrupt individuals do not erase the reality that financial institutions will consider bankruptcy a risk factor. This means that the base rate they will offer you will be higher than they would offer to an individual who has no bankruptcy on file. Do not be discouraged. If you keep healthy financial habits you could refinance in a few years to get a more attractive interest rate.
  • Be realistic in your expectations as well as in your choice of vehicle. A lender will not approve a loan for a luxury car, so do not try to borrow $ 50,000! After a bankruptcy it is reasonable to limit yourself to a convenient and reliable car that will cost you at most $ 10,000.

Let’s talk about numbers


While it is necessary to expect a heavier interest rate than normal, you should not accept the first loan you are offered for fear of being refused elsewhere. If you think the rate you are being offered is unreasonable, do not hesitate to look at another financial institution, negotiate or fight for the best price you can get.

A large down payment is an advantage. The more you can pay for the vehicle of your choice, the better your chance to get by. A down payment of 20% or more demonstrates to the lender that you are serious and that you are ready to make responsible financial decisions.

Now that you know what to expect and have the information you need to make informed decisions, finding the right lender for your financial situation should be child’s play. Take the time to inform yourself, have reasonable expectations and you will be the owner of a vehicle in time to say it!