Qualifying for automobile loans after bankruptcy might seem daunting and impossible. It may seem that any hope of returning to normality or obtaining something as basic as an auto loan may be completely out of your reach. However, one of the important bankruptcy facts to keep in mind is that by implementing some stiff changes in your behavior and budget, you can repair credit after bankruptcy and expand your opportunities.
Once you exit the bankruptcy process, you may need to acquire a car. Bankruptcy will be a major impediment to your goal, but you do have options. The first and best way to get automobile loans after bankruptcy is to begin to learn how to fix credit after bankruptcy, building up your score high enough to enable you to get a good loan. With bad credit, you may only qualify for a loan with a high interest rate, which will only encourage the likelihood of default or another precarious financial tailspin.
If your need to acquire a car is more urgent and you cannot wait to rebuild your credit and qualify for automobiles loans after bankruptcy, you have several options, most of which can net money that you didn’t know you had. Start by tracking your expenses and learning how to create a budget. You might be able to get rid of several costly items that are draining your money: $5 lattes, valet parking, and even eating out several times a week. Just by picking up some skills behind the stove, you might increase your income by $30 a week. By taking a second job, you will lose some free time, but you can add $300 to $500 a week with a part-time, minimum-wage job. You may not want to work 60+ hours a week forever, but if you are able to afford a new car, it might be worth it for a little while.
Another opportunity for adding to your income can come by asking your boss for an advance on your paycheck. Your employer may be more likely to grant you a loan, plus these type of loans usually don’t have any interest attached to them. However, before you ask your boss for a raise, be prepared to answer some of these questions, including the reason you need the loan, how you will repay it, and why his company should consider doing this. You might also ask a family member to grant you automobile loans after bankruptcy, and you should expect to give them the same solid reasons for giving you the money, maybe even by offering better interest rates than they are accumulating in a savings account.
Credit unions and local banks are also great places to obtain automobile loans after bankruptcy. They may be likely to offer you better terms and lower interest rates than a mainstream lender, particularly if you have already have established a relationship there.
You can consider obtaining a co-signer for a loan, though you will have to give them some special provisions to safeguard the risk they will be absorbing. For example, you might consider giving them the ability to control the payments or access the account online so that they will feel more confident. Though it is a risk, you could offer to pay the co-signer two or three months in advance. They could just take the money and run, but when have poor credit, you don’t always have the luxury of perfect solutions.
Credit repair always your best option. However, if you take a look at your situation and recognize the opportunities around you, you may find plenty of opportunities for automobile loans after bankruptcy.
Tag: automobile loans
Get the Best Car Loan and Avoid Credit Problems at the Dealership
A lot of car buyers hoping to get the best car loan have had embarrassing experiences at the dealership. The buyer picks a car and applies for financing from the dealer. The dealer offers an unfavorable loan package, telling the poor buyer that his credit is bad. The buyer is embarrassed. He feels silly for not entirely understanding the loan package, he has doesn’t have time to learn how to build credit. He has already been subjected to some high-pressure sales tactics, and he just wants to get out of there.
This is a sales tactic! It is a scenario intentionally manufactured by the dealer to get you to sign on the dotted line before you have had time to realize what a poor financing offer they have made you. Sometimes, it is even an outright scam: the dealer tells the buyer that he has bad credit just to get the buyer to agree to an expensive financing package.
I guess I can’t get the best car loan with my shoddy credit, thinks the buyer.
The number one way to avoid this unnecessary situation in the first place and get the best car loan is to already have the financing nailed down before you walk into the dealership. Dealers almost never offer the best loan packages, so it is almost always better to avoid bundling the purchase of the car with the financing, warranty, and trade-in of your old vehicle. Shop around for financing ahead of time, using banks, credit unions, and online auto lenders.
Then the dealer can make you a loan offer if he wants, but he knows you are going to compare it to other, probably better, offers. Even if you truly do have poor credit (unlikely if you have attended our free teleseminar), there are far better sources of sub-prime auto loans than the dealership.
If for some reason you still want to find out what kind of financing the dealer can offer you, then the second important step—after applying for financing from other lenders—is known as “The Folder.” The Folder has your credit reports, your credit scores, and some monthly payment calculations based on the target purchase price, interest rate, and loan term. It also has your financing offers from the other lenders. And it contains information about the price other sellers of your desired vehicle will accept. It is perfectly acceptable, and often less costly, to purchase vehicles online these days from dealers all over the country. Once your local dealership knows that you know this, it will be easier to negotiate. The Folder is hated and despised by auto salesman and puts you in charge of negotiations. If you want to get the best car loan, never enter the dealership without it.
The third important method to get the best car loan is simply this: get up and leave several times before agreeing to a deal. If the sales tactics are too heavy-handed—if the dealer is asking for your credit information even though you are not sure you want to apply for financing, if the numbers they are offering do not make sense, if it just feels like you are not going to get the best car loan—get up and leave. Shake the salesperson’s hand and tell him or her you will be in touch. Then walk out. If they tell you their offer is only good for a day, reply calmly and confidently that you are willing to take your chances, and then go.
Only once the dealer understands that you are knowledgeable, educated, prepared and willing to walk away will you start hearing their best offer. Have confidence and do not get emotional. You have financing from other sources, “The Folder,” and numerous other sources from which you can buy your chosen automobile and get the best car loan—and it is a buyers’ market
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