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When can I get a car loan after bankruptcy?
My bankruptcy was discharged a couple of years ago. Since then, I've been working hard not to take on any debt, but my mechanic just gave me a bill for car repairs, and it'd be cheaper to get a new car. My brother told me I can't get a car loan because of my bankruptcy, but I remember my attorney saying I could. She just recommended I wait. When can I get a car loan after bankruptcy?
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Your attorney is right; you can get a car loan after
bankruptcy
. Your attorney suggested waiting because bankruptcy can stay on your credit report for seven to ten years and lowers your credit score initially. The longer you wait, the more likely your credit score will improve. But you can get a car loan at any time after your bankruptcy is finalized.With bankruptcy on your record and bad credit, you will have to work harder to find a lender and should expect higher interest rates.
In your case, I would recommend trying to
trade in your old car
for as much as you can. If you have positive equity, it can go towards your downpayment. If you can swing a downpayment of 20%, more lenders will be willing to work with you as well. If you end up with a loan that you’re unhappy with, know that you’re not stuck with it forever. Down the line, you can always refinance to change your loan the way you need to.
To explore your options, use the
Jerry
app. We’ll compare top lenders and help you switch over to a better deal if it’s available. On average, people who refinance save $85 a month. View full answer
- Gregory R.
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