Trying to get a car loan after bankruptcy? Although it probably seems like a pipe dream to you right now, but it’s much easier than you think to find lenders who will finance your auto – even if you have recently filed for bankruptcy. Now let us be very clear about this. After you decided to file bankruptcy, most of your traditional brick & mortar lenders are not so willing to even consider doing business with you. However, the same cannot be said for non-traditional financial lenders. Many of these lenders have stepped up to fill this pressing need in the marketplace.
When you consider our current times, we are seeing more and more consumers with lower credit scores than they used to have. A lot of lenders had to find a way to work with borrowers having less than stellar credit. Otherwise, they would’ve had to close up their shops. This is just a fact of life. So many of them are willing to consider a car loan after bankruptcy.
Online Lenders after Bankruptcy
With virtually no hope at all of getting a prime car loan with a traditional lender, bankrupt folks have had to look at those lenders who are not in the main stream. Just like the lenders we mentioned before who have had to settle for less than perfect borrowers, these below average borrowers have had to settle for lower quality lenders as well. They were literally made for each other!
So these private lenders are certainly filling a need, but they are taking higher risks too. And with higher risks, the rewards should be higher too – and they are. The terms of these loans are not as good. Interest rates are usually higher and durations of loans are usually longer – which means more profits for the lenders if the borrower doesn’t default on the loan. Hence, the higher risk.
Steps to Get Your Bankruptcy Car Loan
The best thing to do is not drive around and talk to lenders in person. Instead, why not go online and start collecting a list of potential lenders who might give you a car loan after bankruptcy. Do not put them on your list unless their website addresses bankruptcies. You have to realize that if a lender is willing to do business with people who have filed bankruptcies, then they will mention it boldly somewhere on their website. This is because these people represent an entire market for them. Chances are if they do not mention it, they do not accept these kinds of loans – so move on to the next lender.
After you have put your list together, then you need to begin the process of interviewing them one by one. Now your “interview” need not be done in person or on the phone necessarily. Just go through their “support” or “FAQ” sections. Send them an email with a question or two. Sending an email of inquiry is actually a great way to assess the quality of their customer service. Who are you most likely to do business with? The lender who answered your question in a few hours? Or the one who took almost a week to get back to you. Now granted – the email test should not always be a deal breaker, but it certainly should be a black mark.
You need to find out what terms they are willing to offer you. And also, you need to know if there are any special conditions or requirements to get the loan approved. You must always be aware that your car loan will not be a ‘normal’ one because of the bankruptcy on your record – so the conditions of the loan might be normal either.
Future Car Loan Lenders
Like it or not, the financial landscape in America is drastically changing. Many consumers are falling deeper and deeper in debt. And at the same time, we are becoming more and more paperless and automated. Many people are becoming displaced in terms of employment and security.
This new landscape will require newer approaches in virtually every element of our society. And the business of lending will be greatly affected by all this. We will see more people with terrible credit histories because of the shifting employment landscape. This will not be merely attributed to neglect and irresponsibility; it will be because of factors that these borrowers have no control over.
Read more here about getting a car loan after bankruptcy – https://www.consumer.ftc.gov/articles/0224-filing-bankruptcy-what-know