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Can I get a car loan after a Chapter 13 discharge?
I had to file for Chapter 13 and have recently had it discharged by the courts. It was a lot of work to get to this point, and I'm ready to start my life again. I know my credit score is tanked, but can I get a car loan after a chapter 13 discharge?
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations on the discharge! A lot of financial discipline goes into getting it. You’re also correct, your
Chapter 13 bankruptcy
will stay on your credit score for seven years, but you can still get a car loan. To get a car loan:
- Start by shopping around because there are many different types of lenders. Some of whom even specialize with people who have no credit, bad credit, or like you, have recently received a bankruptcy discharge.
- Apply at your local and national banks, credit unions, online lenders, and dealerships. Dealerships with in-house financing may offer you better deals because they don’t always do credit checks, but beware of higherinterest rates.
If you’re having trouble finding a lender, consider:
- Getting a cosigner. If you cannot pay in the future, the lender will go to your cosigner and expect them to pay. Because of the bankruptcy and lowered credit score, this can make you less of a risk in the eyes of the lender while you work to rebuild your credit score.
- Makea large downpayment. A downpayment of at least 20% of the price of the car you’re looking at shows the lender you’re less of a risk.
The car loans you get after bankruptcy aren’t always the best deals, but if you’re unhappy with the car loan you get, you can change it later through refinancing.
Refinancing allows you to make changes to your car loan. For example, you can include or remove a cosigner or adjust terms when your credit score rebounds. You can compare lenders and refinance quickly with the
Jerry
app. On average, car owners pay $85 less every month by refinancing their auto loans.
s.View full answer
- Gregory R.
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