3 Easy Steps to Finance a Car After Bankruptcy
Going through a bankruptcy can be one of the most stressful periods of someone's life. Getting back on your feet afterward can be even more difficult, however, as many banks and credit unions will simply deny your applications for a loan. It is possible, however, to get financing for a car. Just follow these three easy steps to finance a car after bankruptcy.
Start by gathering together any documents you have showing a source of income and any proof that you have made consistent payments on any kind of debt. For most people, this will mean a paystub, but you can also use documentation from a student loan or Social Security payments. To show consistent payments, gather together any credit card statements or any other payments made on any other kind of debt, such as a mortgage or a personal loan. Even utility bills showing that you have kept up with payments on your electrical or water service can work.
The next easy step to financing a car after your bankruptcy is to research the type of car you want to drive and some payment options. Look for reliable models that do not have a lot of associated maintenance. Most importantly, look at the total price of the car, not the monthly payment. Choose a car that you can afford, based on your budget, then look at a monthly payment.
To research payment options, ask at local banks and credit unions about their finance programs for people with bad credit. While many might reject your application outright, you will find a few that can offer you a loan. Be prepared, however, for high interest rates or a high down payment.
Finally, start visiting dealerships and test driving cars. While you don’t need to disclose your financial picture to the dealer, you can tell them that you are interested in comparing the financing they offer to other loans that you have been offered. Be careful to stay within your budget while looking at cars, dealerships will try to sell you something higher than your stated price range.
It should not be difficult to finance a car after a bankruptcy with these three easy steps. Just make sure to keep up with your payments after your purchase. Showing a solid payment history with a car loan is a great step towards repairing your credit.Learn more about how to bounce back after bankruptcy.
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