Due to the competitive nature in the lending industry credit can now be offered to the bankrupt. The loan or credit that you get after bankruptcy will be expensive due the high interest rates. The terms will also be unfavorable because you are considered a high risk. Sometimes you get a lower loan limits than someone with a good credit rating.
How to Get Loan after Bankruptcy
Qualifying for any type of loan after bankruptcy is possible although there are certain steps you need to take first before starting the application process. After a minimum of a period of two years after filing bankruptcy you can actually qualify for a loan. Lenders will be willing to give you another chance but they will look at how much you are paying for your down payment, your monthly income, employment stability, and your repayment plan.
Down payment
Your chances of getting a loan are higher if your down payment is more, if possible you can pay up 10% up front for your mortgage for example. The lender will reduce your interest rate thus the loan becomes cheaper. Paying a higher down payment amount also means that you are now more responsible because you can now afford to make some savings.
Pay up your outstanding bills
In order to improve on your credit rating it is also important for you to make sure that you pay all outstanding or overdue accounts. You can clear those accounts that have got small amounts. This will greatly improve your credit score. You need to check with the credit bureaus whether your information has been updated.
Credit repair scams
It is advisable to avoid companies and individuals who claim that they can help you repair your negative credit rating. These are usually scams. The best person to fix your credit rating is you. You need to take the suggested tips above to increase your credit score and also to qualify for the different types of loans.
Compare different lenders
This is very important especially when you have bad credit, you want to make sure that you get a loan that is cheaper and with attractive terms. You can do this online and there are a lot lenders who are willing to deal with people like you. Some of the factors that you may need to look at in your comparison are things like the costs, interest rates, loan amount and the terms and conditions of the loan. Lenders can be tough when they give out loans to people who have filed bankruptcy.
Tips and comments:
Once you file bankruptcy, it means all creditors won’t be able to file any legal claims against neither are they allowed to phone you or get in touch with you in any way. This will give you a peace of mind and you will be able to concentrate on repairing your credit. The earlier you take steps to fix your credit, the earlier it will be possible for you to qualify for a loan.
