How do you get a car loan after bankruptcy?


Quick Answer

Getting a car loan after bankruptcy is possible by looking for bankruptcy car loan dealers and seeking good deals. You can also get secured car loans if you have collateral that can be attached to the loan.

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Full Answer

  1. Talk to your bankruptcy trustee regarding the purchase of a car

    Depending on the type of bankruptcy you declared, you may have to get permission in writing from your court-appointed bankruptcy trustee to apply for a car loan. It takes two to four weeks to get the permission.

  2. Start re-establishing your credit

    You may need to establish a secured credit cards with a bank. Since the interest rates for these cards are so high, it is advisable to spend little and pay on time. Prompt payment should improve your credit score. After three to six months, you may have raised your credit score enough to qualify for better interest rates on a car loan.

  3. Search for an inexpensive car

    Car loans after bankruptcy have interest rates as high as 20 percent. Avoid huge repayments by searching for an inexpensive car that you can afford in your current financial status. However, look for good vehicles that are not likely to cause you problems.

  4. Search for lenders diligently

    Shop around for good loan rates in the market. Call several dealers before settling on a deal. Read and understand the terms and conditions of each lender, and seek explanations about things you do not understand. Sign a deal with the selected dealer, and pay your loan payments promptly.

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