For the quarter of Americans who possess bad credit, obtaining bankruptcy auto finance can be a major issue. However, receiving car loans after bankruptcy and paying them off in a timely manner can help rebuild your credit history. In order for drivers to increase their chances of getting approved for an auto finance after bankruptcy, the following tips should be adhered to:
Attend Meetings and Obtain Documents
Whether drivers are in a Chapter 7 or a Chapter 13 bankruptcy, there are certain requirements that must be met before loaners will even consider a driver’s request for bankruptcy auto finance. For those drivers in a Chapter 7 bankruptcy, lenders will usually order borrowers to attend a 341 meeting with all creditors present. For those drivers in a Chapter 13 bankruptcy, lenders require a letter presented from a court-appointed trustee that is overseeing the case; this letter, called an Authorization to Incur Debt letter, proves to lenders that the debtor can pay off additional debts.
However, if a driver has been in multiple bankruptcies, this can thwart them from receiving bankruptcy auto finance. Most potential buyers must also pay a down payment as well as present proof of a monthly or yearly income.
As with any financial investment, potential buyers should compare the costs of different businesses. Buyers should avoid large instance rates if possible. The larger the down payment, however, the higher chance a potential buyer has of their bankruptcy auto finance request being approved by the lender. A large down payment shows lenders that the driver is willing to commit to a payment schedule. Of course, when in bankruptcy, buyers should expect to have to pay more money than they would normally have to if all was well financially. Nevertheless, this is no reason not to compare prices and just accept the first rate that is quoted.
Whether or not a driver’s bankruptcy auto finance is approved can be directly tied to a driver’s credit history. So, one way to reduce the cost of bankruptcy auto finance is to become more reliable. Drivers should take driving classes, pay to remove previous infringements from their records, and pay all bills on time to insure that their credit rating will pick up. Bankruptcy auto finance is a surefire way for drivers to improve their credit score and thus improve your auto insurance payments later on in life.
Bankruptcy auto finance can be obtained from a number of places. Potential buyers should know who to contact in order to apply for these auto loans. Car dealerships have available rates, as do credit unions (although this method is not always free and can take a long amount of time to complete). Of course, finding things online is the most convenient way for potential buyers to discover where to find bankruptcy auto finance.
By following the aforementioned steps, potential buyers will find it much more achievable to attain bankruptcy auto finance, even if they are hindered by a bad credit score.