Bankruptcy usually refers to a situation where a person or business can’t repay their outstanding debts. While bankruptcy means that you were financially ruined, financial institutions can understand how choosing bankruptcy is sometimes a good option. It’s possible now to get approved for an auto loan after filing for bankruptcy.
In Canada, it shouldn’t be stressful to finance a car after going through bankruptcy. There are auto financing companies like Find My Auto that help individuals with bad economic situations get easy and affordable auto loans. Filing for bankruptcy doesn’t mean you won’t be able to get a new car or rebuild your credit in the future.
Believe it or not, one out of every six Canadian adults will eventually go bankrupt, which means going bankrupt is a common phenomenon. There is no need to be embarrassed about how this will have an impact on your relationships with the lenders. Here is what you need to do to improve your chances of getting approved for a car loan after bankruptcy:
Have realistic expectations
Lenders determine the interest rate on car loans based on the applicant’s credit report or history. Individuals who have a bankruptcy on their credit report are likely to get loans on relatively high interest because they are considered as high-risk consumers. Therefore, it’s important to be prepared and have realistic expectations.
First of all, it’s not advisable to choose an expensive car when your financial circumstances are not very well situated. Most lenders will not approve an application for a car loan when the applicant is going through bankruptcy and asking for an expensive vehicle. During financial bankruptcy, it’s recommended to select a car that is around or less $25,000
Get your credit report and score
It’s probably a good idea to know your credit information after bankruptcy. The lender will also consider your report, so you must know what they are looking at. Also, make sure you are clear about your previous loans. Financing a car and making on-time payments will help you reestablish your credit.
Find the right lender
It’s critical to find the right lender who works with people who have gone through bankruptcy. It shouldn’t be difficult to find several options for your situation. Finding the right lender and getting pre-approved will make it less stressful to finance a car after bankruptcy. It will help you understand the terms of the loan, monthly payments, duration, and the interest rate.
Find My Auto works with hundreds of dealership partners across Canada to help people get approved for auto loans no matter their financial situation. Whether you have gone bankrupt or have poor credit, feel free to apply. It takes only a few minutes to fill out our simple application form.