Can You Get a Car Loan After Bankruptcy?Feb 28th, 2022
It is very easy to get into debt and can be very difficult to escape from it. Sometimes the financial burden cannot be lifted and the only solution is to file for bankruptcy. Make no mistake, filing for bankruptcy is a move of last resort. The financial consequences can be devastating. However, that doesn’t mean life stops and people don’t have needs – like buying a car. So, can you get a loan after bankruptcy in Canada? The short answer is, yes. Though it will likely be more expensive and be more difficult to do. Let’s take a look at a few things you might need to know.
Post-Bankruptcy Loan Waiting Period
A bankruptcy filing will stay on a person’s credit profile for six years. It is important for people in this position to immediately make efforts to rebuild their credit. This could include staying current on any remaining obligations. In fact, finding a lender to issue an auto loan could really help someone rebuild their credit faster.
There are few things someone can do to rebuild their credit after filing for bankruptcy that don’t involve getting a potentially expensive car loan. Financial experts suggest:
- Applying for a secured credit card and paying off the balance each month
- Remain current on all utility bills
- Avoid opening new lines of credit that would exceed 35 percent of a person’s credit limit
- Keep new credit applications to a minimum
What Does Applying For a Loan After Bankruptcy Look Like?
There is no great way to say this, applying for a car loan after filing for bankruptcy is going to be more difficult. Traditional banks and credit unions may not approve someone with a recent bankruptcy on their record. That doesn’t mean that people in a tough financial situation don’t have some options. People should start their search for a post-bankruptcy loan at dealerships with in-house financing operations, such as ours here at Surgenor Auto Credit. These places will almost certainly charge more interest on the loan, but they also tend to take more into account than just a credit score.
Additionally, buyers can help themselves out a little bit if they are able to put down a larger down payment. Going big on the down payment means less money needs to be borrowed to pay for the vehicle.
Make an appointment with a Surgenor Auto Credit representative, today, to see how we can help people in all kinds of credit situations get the safe and affordable transportation they need to live their lives.