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Can I get a car loan while in Chapter 7?
I filed for Chapter 7 bankruptcy, but I need a car to get to work. I can’t afford to pay for one outright, so I’ll need a loan. Can I still get approval for a car loan if I’m in Chapter 7?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Getting a
car loan
during bankruptcy is difficult, but not impossible. Some high-risk lenders may approve you, but the terms and interest rates will be somewhat unreasonable.Because of Chapter 7’s impact on your credit, lenders will take advantage of the situation to insist on higher interest rates and less flexible terms. Furthermore, traditional lenders like banks and credit unions may deny your loan, so you might be forced to deal with independent lenders.
Fortunately, you can raise your chances of loan approval by finding a cosigner or saving up for a large down payment. If you can’t afford a down payment or find a cosigner, start taking on small debts and paying them off to build your credit score. As your score increases, you’ll be more eligible for better term loans!
If you do take out a car loan, start saving for your monthly payments with
Jerry
. A licensed broker, the Jerry app can help you find and compare quotes from over 50 top providers like Progressive and Nationwide for free. Users save an average of nearly **$900 per year** on car insurance—and it only takes a minute to sign up!MORE: Can I keep my car in bankruptcy?
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