If you are planning to apply for a car loan after bankruptcy,
there are two key items you need to focus on:
1) Increasing your chances of qualifying for a car loan after
bankruptcy
2) Reducing the interest rate on the car loan after bankruptcy
Let's look at each item in more detail:
1) Increasing your chances of qualifying for a car loan after
bankruptcy
One way to increase your chances of qualifying for a car loan
after bankruptcy is to increase your credit score.
How do you increase your credit score? One way is to update your
credit reports. This means removing any inaccurate or obsolete
negative information from your credit reports. This will take an
investment of time on your part - but if it means the difference
between qualifying (or not) for a car loan after bankruptcy it
can be worth the effort.
Another way to increase your credit score is to add positive
items to your credit report - but few people know about this
technique. There's not enough room to go into it here, so I'll
save that for another article.
In After Bankruptcy Credit Solutions I go into detail on a
number of ways you can increase your credit score. While there
isn't enough room to cover all of them here, or any of them in
detail, hopefully this gives you an idea of some of the steps
you can take.
Another way to increase your chance of qualifying for a car loan
after bankruptcy is to increase the amount of your down payment,
or look at a lower price car.
For example, let's assume you have $1,600 for a down payment on
a car and you're looking at a $16,000 car - that's a 10% down
payment. But what if the lender won't approve the loan because
the down payment isn't large enough? See what they can do if you
consider an $8,000 car. Now your $1,600 represents a 20% down
payment. In addition, everyting else being equal, the payment on
your car loan after bankruptcy would be lower if you finance it
for the same period of time.
Next, let's discuss some ways you can reduce the interest rate
on a car loan after bankruptcy...
2) Reduce the interest rate on the car loan after bankruptcy
Here's where increasing your credit score pays off again! Why?
if you are able to increase your credit score enough to reduce
the interest rate you pay on a car loan after bankruptcy, you
could save $100s or even $1,000s of dollars.
For example, let's use a $15,000 car loan after bankruptcy as an
example. Let's say you increase your credit score enough so that
you receive an interest rate of 11% instead of 14%. Over the
life of the loan you will end up saving about $1,067 in interest
- that's money that stays in your pocket!
There are other ways to lower the interest rate on a car loan
after bankruptcy - increasing your credit score is just one of
them. For example, there's another technique you can use to
reduce the interest rate you pay on a car loan after bankruptcy
- and it can save you up to $100s of dollars (or more). There's
not enough room to cover it here, but it's a powerful technique
if you don't have time to increase your credit score, and need
to finance a car immediately. I go into detail on it in After
Bankruptcy Credit Solutions.
Now you know some specific techniques you can use to increase
your chances of qualifying for a car loan after bankruptcy, as
well as potentially reducing the interest rate you pay in the
process!
Copyright (c) 2006 Innovative Solutions Publishing, Inc. All
rights reserved.
DISCLAIMER:
This information is designed to provide only a general overview
of the subject matter herein.
This information is provided with the understanding that neither
the publisher nor author is engaged in rendering legal,
accounting or other professional advice. If legal or other
expert assistance is required, the services of a professional
should be sought.
Neither the publisher nor author shall be liable for any loss or
damages, including but not limited to special, consequential,
incidental or other damages, caused by the information contained
herein.
About the author:
R. Lawrence Anderson is author of After Bankruptcy Credit
Solutions, which shows individuals how to qualify for credit and
loans after bankruptcy. For details visit:
http://www.bankruptcy-credit-solutions.com
