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Can I get a car loan a year after Chapter 7?
It's been a year since I filed for Chapter 7 bankruptcy, and I want to get a car loan. Is this possible?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yes, it’s possible to get a
car loan
a year after a Chapter 7 bankruptcy, but you likely won’t find many lenders willing to work with you, unfortunately. When you’re in bankruptcy, your credit score takes a significant hit, which can lower your chances of car loan acceptance.However, it’s not impossible. Many lenders work specifically with those who have poor credit or have just come out of bankruptcy. The only problem is that your interest rate is likely to be double digits, which can lead to:
- Higher monthly payments
- Going upside down on your car loan for a lengthy period
- Inability to refinance in the near future
- More interest paid over the life of the loan
- Chance of defaulting
Because of these downsides, you should think long and hard about whether you need a car loan or if it’s just a want. Paying cash for a decent used car is always a great alternative, and you can often save thousands for a reliable car to get you to and from work and errands.
Whatever you decide to buy, just remember that you also need to get car insurance for your car loans. Use the
Jerry
app to compare rates from up to 50 insurers, and discover how much you can save in just a few minutes.More: Can I keep my car in a bankruptcy?
View full answer
- Gregory R.
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