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Car Loans After Bankruptcy - Tips to Getting Approved
An automobile loans following a bankruptcy is one way to help build back your credit history. Actually, once your bankruptcy closes, you are able to apply for a auto loan the next day. To obtain approved with the best rates for the auto loan, follow these tips.
Take a look at Credit Report
Before you start applying for a car loan, take a look at your credit report and make sure all of your accounts have been in order. It's not uncommon following a bankruptcy to determine open accounts that should be closed, which hurt your credit history.
Acquire the best at your credit report, attempt to add a page explaining the problem that resulted in your bankruptcy. If there were extenuating circumstances, lenders may approve you for any better rate than under normal conditions.
Plan Your vehicle Purchase
Before purchasing a vehicle, decide what you can afford in a monthly auto loan payment. This will help you choose which financing package is best for you. Both the loan amount and period of payments will determine your monthly payments, so there is flexibility in determining which vehicle you can afford to purchase.
Make use of a Auto loan Lender
Car loan lenders make their cash by finding a loan. Car loan lenders work with several financing partners to back loans with all types of credit risk, including bankruptcies.
Online auto loan lenders cope with a large number of loans, and can usually find you a better deal than the local car dealerships. Online auto loan lenders will send you a check when you are approved, basically causing you to a pre-approved car loan buyer.
Explain Your Situation
Car loan applications will ask if you have ever declared bankruptcy and why. This is your chance to explain what led as much as the situation and what steps you have taken to resolve your credit situation. Be sure to include improvements inside your credit history too.
Consider Refinancing
Once you are approved for any auto loan, keep an eye on future refinancing. By making regular payments on all your bills, in a year's time you can qualify for significantly lower rates of interest. In 3 years, you are able to construct your credit score to near excellent and qualify for even lower rates.
