Bankruptcy can certainly turn your financial world into chaos. It leaves a negative mark on your credit history that is difficult to ignore and even more difficult to escape. If you have had to file bankruptcy in the past few years, you are certainly not the only one. People file over 250,000 bankruptcy petitions every four months, and these figures include only United States cases. Many economic factors can contribute to an increase in bankruptcy filings. The good news is that you can still get a personal loan after bankruptcy.
Unemployment, illness, and injury are just some of the reasons why debtors seek bankruptcy for financial relief. If you have become delinquent on your mortgage payments or car payments, bankruptcy may be the only choice you have to protect your assets from possible repossession or foreclosure. If you have come out of bankruptcy recently, you should start the process of rebuilding your finances and increase your chances of borrowing by getting a personal loan after bankruptcy.
Rebuilding Your Reputation
In order to start the process of rebuilding your credit history, your financial reputation and your name, you should try to get approved for a small personal loan. You can apply for a secured or unsecured loan; however, you should understand the difference between the two. The main difference is the amount you will pay in interest. Those who have recently filed for bankruptcy can expect to pay a higher interest rate. However, remember that you are paying a higher interest rate so that you can rebuild your credit.
The Two Types of Personal Loans
As previously discussed, there are two different types of personal loans, unsecured and secured. A secured personal loan is one of the easiest types of loans to get approved for because it is backed by collateral. Secured loans can range from $1000 to $20,000. The amount the lender approves will be dependent on your current income and if you are able to repay the lender.
Unsecured loans are more difficult to qualify for because the lender does not have a lien on any of your property. If you want to get approved for an unsecured loan, more than likely you will probably need to have a qualified co-signer on the loan as well.
It is not impossible to get a personal loan after bankruptcy. However, you should keep in mind that you are trying to rebuild your credit. You should only apply for an amount that you know you can pay back as required by the lender.
Douglas Jacobson Law Firm specializes in bankruptcy and debt relief counseling. Contact us today at 678.341.9114 for a free consultation.