Even if you recently found yourself in bankruptcy court because of past financial issues, this does not mean you cannot purchase a vehicle. There are several ways to get auto loans after bankruptcy. Lenders frequently approve auto loans to individuals who have filed for bankruptcy. However, consumers need to know that the interest rate on this type of loan can be extremely high.
The best way to purchase a vehicle after bankruptcy is to compare shop like you usually would. You may want to agree to any auto loans after bankruptcy. But it is best not to take your first offer. Previous studies have concluded that consumers paying higher interest rates are more likely to default on auto loans. This leads to the banks repossessing the vehicles.
Stay Positive When Searching for Auto Loans after Bankruptcy
Just because you have a bankruptcy on your credit report, it does not mean that your situation is dire. If you previously made loan payments on time and your bankruptcy was due to a situation beyond your control, you may be able to finance a vehicle through a lender such as a credit union.
Credit unions are different from large banks in that many are community-based. This means that the credit union may be more lenient with your situation if the local economy has been struggling.
Bankruptcy was previously seen as a consequence of poor financial management. However, hardships such as divorce, death, and medical bills can also cause a bankruptcy declaration. The national and international economy tanked during the Great Recession, and many became underemployed or unemployed for a year or longer.
Do Not Expect To Ride In Luxury
It is important to stay realistic when applying for auto loans after filing for bankruptcy. Your court-approved trustee may agree to an auto loan, but chances are the trustee will not sign off on a loan for a luxury vehicle. You will likely get a used vehicle priced at $20,000 or below.
If you filed for bankruptcy some time ago and are getting your finances back in order, you have a better chance of getting an auto loan with a lower interest rate.
So, yes, banks will approve you for auto loans after bankruptcy. Speak with an experienced bankruptcy attorney to discuss your options with banks that work with bankruptcies for auto loans.
If you need an experienced and knowledgeable bankruptcy attorney in the North Georgia area, contact us to schedule a free consultation.
