How soon after bankruptcy can you get a car loan?
How soon after bankruptcy can you get a car loan? I hit a deer and totaled my car. My insurance will help, but it still won't be enough for a new car. I recently filed for bankruptcy.
I’m so sorry to hear about your car accident. I hope you are okay.
The good news is that there is no set time frame keeping you from getting a car loan. In some cases, people can even get a car loan during bankruptcy. However, having a bankruptcy on your credit history can make things difficult.
Bankruptcy stays on your credit report for ten years if you filed chapter 7 and seven years if you filed chapter 13. You can get a car loan at any point during chapter 13 with court approval. With Chapter 7, you must wait until the bankruptcy documents are finalized, which can take four to six months.
If you can wait and build your credit to a score of 660 or higher, your chances for a good car loan will improve. If you need a car sooner, you’ll need to prove your worthiness to a lender. To help, you may want to consider a cosigner or larger downpayment.
- A cosigner with good credit who is willing to sign onto your loan can help reduce your risk as a borrower.
- A downpayment of 20% or more can also reduce your risk. The payout for your totaled car should help with this.
If these aren’t feasible, shop around with various lenders. Since you’ve filed for bankruptcy, you may have to look at lenders that specialize in those with bankruptcies or lower credit scores.
Even if you don’t receive the best terms and conditions, you have the option of refinancing in the future.
An easy way to explore your refinancing options is with the Jerry app. Jerry helps compare lenders to make sure you’re not overpaying. On average, people who refinance save $85 a month.
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