Can I Get A Bank Car Loan After Bankruptcy?

Obtaining a bank car loan after a bankruptcy has been discharged is possible. Today banks see these situations more and more often with the recession and unemployment rates being so high. Ten years ago it may have been hard to find a bank auto loan after bankruptcy, but today it’s much easier. Here’s what you need to know.

Apply now for a Car Loan quote or read below for more information.

Compare Rates Online
One of the easiest ways to find a bank car loan even with a discharged bankruptcy on your record is to go online. You can find a wealth of information on the Internet. There are many sites devoted to mass submission of your information too. These sites are great because you fill in your information one time and the site will submit the information to many different banks. This allows the banks to compete directly with each other for your business, and you never have to leave the comfort of your home. It also saves you valuable time since you won’t have to make a lot of phone calls or visit local banks in person. Even with a bankruptcy you should be able to use these sites to find competitive rates.

Expect Higher Rates
With a bankruptcy on your credit report you become a much higher risk to the banks who loan for new cars. This is really a small price to pay though considering you have already filed for bankruptcy. The rates you pay with a bankruptcy run anywhere from 15-20%, which is higher than the average car loan rate. Banks will offer lower rates - even for bankruptcies - if they have a relationship with you already. The rates will still be higher, but going through a bank you have established yourself with, can save you a few points. Over the course of the loan, this can translate into several hundreds of dollars in savings.

Be Realistic in Your Car Choice
A bank is not going to offer you a loan for an $80,000 vehicle after a bankruptcy. In fact, you are looking at getting financed for amounts under $15,000. You may not be able to get that souped up SUV you were hoping for, but $15,000 will get you a reliable car that will serve its intended purpose. After a few years you can look at trading in the basic car for something closer to what you were hoping for. But for now, understand that unless your dream car is a sub-compact, you will likely have to settle for your second or third choice.

Expect to Put More Down
The more money you have to put down on your car, the higher the chances are of getting a bank loan even with a bankruptcy. This shows the bank that you are serious about your investment. The higher the down payment you make, the more you have invested in it. The bank sees this as a positive since you are probably not going to want to just throw that initial investment away. Whatever car you choose plan on putting at least 20% down, more if you can afford it.

Having a bankruptcy on your credit record isn’t the worst thing in the world. Things happen. Lenders understand this and are willing to give you another chance. As long as you understand what to expect you will have no problem finding a car loan after filing for bankruptcy.