Sometimes serious financial setbacks happen and sometimes bankruptcy is the best way forward. Life keeps going and, for most folks, a vehicle is an essential part of that process. When you file for bankruptcy, you are essentially wiping out your debts, as well as your credit score and history. The positive news is that getting a car loan after bankruptcy is possible in many cases. You’re not the only one who has faced bankruptcy, in fact, it is quite common nowadays.
How long should I wait after my bankruptcy to buy a car?
After claiming bankruptcy, you don’t have to wait years or until the end of your bankruptcy to buy a new vehicle. You will want to ensure that you avoid any other bad debts or negative payment history as much as possible, as this will negatively impact the chances of your loan getting approved.
How to get a car loan after bankruptcy (5 steps)
Here are five steps to help you start rebuilding your credit history and get a car loan after your bankruptcy:
Step 1: Be realistic in your expectations.
You won’t qualify for the same loan terms that you would qualify for if you hadn’t claimed bankruptcy, so be aware that the terms of your loan, like your interest rate, will be different than someone who has an average credit history.
Step 2: Budget and work out how much you can afford.
You won’t be able to qualify for a loan for a luxury vehicle, so don’t expect to be able to finance a $90,000 sports car and then get discouraged when you’re denied. After claiming bankruptcy you need to be realistic and choose a practical vehicle that works within your budget.
Step 3: Get pre-approved.
This will help make buying a car after bankruptcy easier and less stressful. When your application is pre-approved, you’ll have the benefit of knowing the terms of your auto loan, like the interest rate and your monthly payment and loan duration before your shop for your vehicle. Besides streamlining the financing process, getting pre-approved for your car loan enables you to avoid going from dealer to dealer and decline to decline.
Step 4: Choose the right lender.
There are lenders, like Birchwood Credit Solutions that specialize in working with customers who have gone through bankruptcy. We look at your income, expenses, payment history, job status and other factors outside of your bankruptcy and credit score to structure a loan you qualify for. Learn more about our car loan qualification process here.
Step 5: Investigate your refinance options.
Don’t forget that you will be able to refinance your loan in a couple of years if you keep up with your payments.
We make auto financing easy
Get Started: Getting started is easy. Tell us what type of vehicle you’re looking for, your contact and employment details, and from there we can start working on getting you approved.
Loan Approval: Regardless of what has happened in your past, you deserve some credit. We work with you to assess your current situation and approve your loan quickly and hassle-free.
Shop and Drive: Our goal is to get you driving as quickly as possible. Once your loan is approved you can then shop our dealership inventory to ensure you drive away in that perfect vehicle. It’s that easy!
Apply online here and get your pre-approval in less than 3 minutes!