After filing for bankruptcy, the negative marks can stay on your credit report for ten years. However, if you decide to buy a vehicle, you may think it will be impossible to find any lender who will give you a loan.
Some lenders will allow you to buy a vehicle after filing for bankruptcy. However, this often means that you’ll have to pay a higher interest rate. Thankfully, if your credit improves after buying a car with high-interest rates, you can look into refinancing.
According to Lantern by SoFi, you can “compare auto loan refinancing rates, selected just for you.” This can help you find the best deal possible with a refinance loan. SoFi has a car refinance calculator that allows borrowers to see how much they can save on their payments by getting a lower interest rate on their current car loan.
Should You Buy a Vehicle After Filing for Bankruptcy?
The answer to this depends heavily on your financial situation and transportation needs, and it’s important to consider buying an affordable vehicle. Having a reliable car is essential for people who need to drive for a living, so bankruptcy can’t and shouldn’t stand in your way.
Obtaining Financing for an Auto Loan After Bankruptcy
If possible, paying cash would be the best option for buying a vehicle after filing bankruptcy. Unfortunately, most people don’t have the money to pay for a car. This means finding lenders willing to work with you and your not-so-perfect credit history.
After filing for bankruptcy, finding a new car loan can be more challenging. This is because many people have a hard time finding a lender who will work with them. However, if you’re not able to find a good deal on a new car loan, you may have a better chance of getting a loan for a used vehicle.
● Buy Here, Pay Here Dealerships
Although buy-here, pay-here dealers can work with you if you have a bankruptcy, they can cost you more than the car. So before resorting to this option, inquire about hidden fees.
● Credit Unions
If you’re a credit union member, then you might be able to get a better deal on a car loan. This is because credit unions are not-for-profit organizations, and they can offer lower interest rates than other types of lenders.
● Find a Co-signer
If the other options are not working, then you may want to ask someone you know with good credit to co-sign your loan. Before you go this route, make sure that the person you use as a co-signer is fully aware of their rights and responsibilities with the loan process.
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When to Buy a Car After Bankruptcy
The best time to buy a car depends on your financial situation and credit score. However, if you’re not able to wait for your score to improve, you should start looking for the best deal now.
Although it’s possible to purchase a new car after filing for bankruptcy, it’s important to make sure you can afford it. So before taking out a loan, make sure that you thoroughly research all of your options.