Car loan after bankruptcy is the best way of increasing your current credit rating. Car loans are facilities provided to consumers to buy cars even when one do not have enough financial resource at that time. The banks provides loan equal to the cost of the car, which a consumer wishes to purchase. The car purchased itself is considered as collateral and there the loan becomes a secure one. In secured loan when the customer fails to repay the borrowed amount the lender has the right to sell the car and recover their loan amount. A bankruptcy does not create any problem when it comes to sanctioning of car loan. Time period for applying a car loan after bankruptcy differs from place to place and case to case. In some cases, one can apply for a bank loan immediately after the closing of the creditors account. Online car loan lenders also can help you crack the best rate of car loan.
Few steps to be followed to get the best rates of car loan after bankruptcy are;
* Review of credit report – Check the credit report before applying for a car loan ensuring that the accounts are in order. Try adding a page about the circumstances that lead to you bankruptcy in your credit report.
* Purchase car after planning – Only the car for which one can afford monthly payments should be purchased. The loan amount and the length of payment decide the monthly installments and this should help in deciding which car to purchase.
* Take help of a car loan lender – Car loan lenders help you find the best loan, as they work with financing partners to back loans. Sorting help from online car loan lenders is a better option than local distributors. These online car loan lenders have contacts with more financing partners than the local distributors.
* Explaining your situation – Explain the situations, which lead to your bankruptcy, and the steps you took to resolve your credit situation. If your reasons and explanations are satisfactory, one can get a better rate for your car loan.
* Consider refinancing - After the approval of a car loan, see that you pay bills regularly, which would help you get lower interest rates in a year’s time. If you keep on paying you bills regularly in three year’s time your would have an excellent credit rating and qualify for even a lower rate of interest.