Car Loans After Bankruptcy - How To Negotiate The Best Deal
Written by: Carrie Reeder
A car loan after a bankruptcy is one of the easiest types of
secure loans to get. Negotiate the best deal by taking control
of your financial situation. With so many lending options
available, you can choose your lender. Start by tidying up your
credit report. Then, look for car financing before you start
shopping. Not only will you get a good rate, but you can
negotiate an even better price for your new car.
Be Proactive In Securing Financing
Don't fall for dealership financing targeted for those with poor
credit. Often times you will get stuck with a high rate loan and
a high costing car. Instead, be proactive about securing your
financing before you shop for a car.
This way, you have the most options on where you want to
purchase a car. And you can get a better price because you have
"cash." They will never know you have a bankruptcy in your past.
Straighten Up Your Credit Report
Make sure your bankruptcy has been completely settled before
getting a car loan. You can get a free copy of your report
online to check that all qualifying accounts have been closed.
Also verify that your payment history is correct.
While you are looking at your credit report, you may also want
to look at your FICO score. With a recent bankruptcy, you can
expect your score to be in the low 500's. After two years
though, you can have a score over 650, qualifying for market
Increase Qualification Factors
Even with a bankruptcy, you can lower rates with several
factors. A down payment of 20% or more is a good start, so is
having little debt and cash reserves in the bank.
You can further reduce your rates by being selective with your
terms. Adjustable rates are usually lower than fixed rates loan.
A three year loan will also have lower rates than a five year
Search For The Right Lender
Searching for the right lender will also help you save on loan
costs. Compare rates and fees based on loan quotes. Car loan
broker sites can help you analyze multiple offers side by side.
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