After a difficult year, 2021 provides a great opportunity to start fresh and get your finances back on track – one of the best ways to regain financial trust is to attain a post bankruptcy car loan. For many of our clients, bankruptcy and poor credit are common problems that pose a lot of questions for buyers. In this article we are going to share some advice on getting a bankruptcy car loan and a few additional tips to put you on the right track.
When Should I Apply for a Bankruptcy Car Loan?
Despite the 6 year mark bankruptcy leaves on your credit report, this doesn’t contribute to how soon you can re-apply for new credit. In fact, it is extremely important that during this time you work towards achieving a great credit score. This means paying dues on time and acquiring trust through punctual payment of financial contracts such as loans. While you may not be approved for a car loan at the time of your bankruptcy proceedings, don’t be discouraged because once they wrap up it is possible to attain a loan. It will take time for you to regain enough financial trust to qualify for a loan, so starting early is good.
How to increase probability of loan after bankruptcy
There are many ways to better your chances of getting a bankruptcy car loan. As soon as you receive your discharge from bankruptcy, it is essential that you get a credit card and pay off your monthly debts on time. It is also a good idea to stay below the limit on your card. This will make paying back money owed much less stressful. Saving is always a foolproof plan – financiers love people who are diligent about building their savings. These tips will help you build a reputable credit score that will greatly help you when it comes time to apply for an automotive loan.
Once you are in the position to fill out your car loan application, be sure to come equipped with a down-payment or vehicle with equal trade-in value. Additionally, you will need to provide evidence of employment for the prior month.
Work towards achieving a higher income as it will indicate your ability to pay your dues. This combined with a reasonable down payment or proof of savings is likely to get you a car loan after bankruptcy.
Watch out for dishonest lenders
If you have bad credit, you are more likely to be taken advantage of by lenders offering too-good-to-be-true interest rates. It is very crucial that you pay close attention to deals that seem unrealistic or untrustworthy. Research and review the company to avoid getting into a bad contract. Talk to past customers, read reviews, and dig up what you can to ensure you’re in safe hands. Being thorough when reading through the fine print is essential to your financial safety when dealing with bankruptcy car loan companies. Look at when the payments must be made and how that factors into the affordability of the deal in combination with your income. Understanding the payment frequency of your contract is key in your financial success.
Report your credit
Once you’ve been approved for your loan, ensure that it has been reported to a credit reporting agency in Canada. Be punctual with your debt repayment, and ensure that payments are recorded by the government. This way, you will continue to build up a good credit score. Some companies don’t report their loans to the necessary companies so make sure you double check.
Attaining a bankruptcy car loan is a difficult process that requires a great deal of effort. It’s important to start early and be faithful in making your payments on time. This way you will increase your chances of qualification. Contact us at Transcan Leasing today to start the application process or to ask any questions you may have!