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How soon can you get a car loan after bankruptcy?
How soon can you get a car loan after bankruptcy? I need a car to pick up my kids from school. The family who was organizing their carpool moved. We don’t have any other options right now and filed for bankruptcy two years ago.
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
With kids resuming in-person learning, more families need to make transportation arrangements. Luckily, you can get a car loan any time after
bankruptcy
. That said, the type of bankruptcy you filed for will impact the rates you receive. Chapter 7 bankruptcy stays on your credit history for 10 years and chapter 13 stays on your credit history for seven years. Since you filed two years ago, you will likely have higher interest rates as the bankruptcy is still fairly recent.
As you need a car sooner than later, getting a cosigner or saving up for a larger downpayment can significantly improve your chances of getting a loan.
A cosigner is a friend or family member willing to sign onto your loan. They should have a good credit score and understand that they will be liable to cover the costs if you cannot pay. A cosigner can help lower those high-interest rates and get you approved.
A larger downpayment can also lower the amount you take out in a loan. A goal is about 20% of the sticker price of the car you plan to get. This can mitigate the risk in the lender’s eyes and help you get that stamp of approval easier.
An easy way to help save for a downpayment is to cut the cost of your car insurance. With the
Jerry
app, you can compare 50+ top insurance companies, like Nationwide, Allstate, Safeco, Progressive, and Travelers. The average Jerry user saves $879 a year!View full answer
- Gregory R.
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