Life After Bankruptcy: Financing A Vehicle

17 May 2017
 Categories: Law, Blog

Bankruptcy can often be a lifesaver for those in a precarious and stressful financial situation. It can often help reset your debt and help you get a fresh start. However, it does ding your credit in most circumstances, making it more difficult to get any type of loan. As time goes on, chances are you will eventually need to purchase a vehicle. Many who have filed for bankruptcy become concerned that they will not be able to buy a vehicle with a loan. However, with some work and research, you can find a way to finance a car using a sub prime loan. Here are some things to keep in mind when seeking this type of financing:

Find a Lender to Work With You

In many cases, finding a lender after bankruptcy can be difficult. Be prepared to demonstrate that you are able to pay all of your monthly bills on time every month. This will help increase your odds of getting financed with a sub prime lender.

Once you have paid your bills on time for several months, you next need to find a sub prime lender. A sub prime lender specializes in those with less than perfect credit. Keep in mind that any lender willing to work with a bankruptcy is going to charge considerably for doing so. If you really must finance a vehicle, however, this may be your only route as far as financing is concerned.

To find a sub prime lender, you will need to search online to find the best results. Most lenders will advertise their rates in order to be competitive. Once you have chosen your lender, you will begin the application process. Once pre-approved, you can visit dealerships to start shopping for a vehicle. Be sure to let them know you have secured your own financing.

When Sub Prime Loans Are Not an Option

If you are not qualified for financing with a sub prime loan, there are some options you have. The first thing to consider is saving up cash to purchase a very inexpensive used vehicle until you have repaired your credit. After you have spent time rebuilding your credit, you can then apply again for a sub prime loan.

Another option you have is to apply for a pre-paid secured credit card that is issued through a bank. It is not a true credit card, in that you are not extended credit by the bank. Instead, you deposit your own money into an account. You can then use your own money as a source of credit. You can make regular deposits into this account to help improve your credit. This money can be used for anything, from making grocery purchases to buying a vehicle. The goal in getting this type of prepaid account is to help reestablish your credit and eventually qualify for a regular loan. For more information, contact companies like Stuart R Whitehair Attorney.