Bankrupt? Car Financing Options for Canadians

No one likes hearing no. Fear of rejection is what keeps many Canadians from applying for auto loans that can help them drive the better, newer car that perfectly fits what they are looking for. Unfortunately, the financing process can seem tricky and overwhelming to inexperienced buyers, buyers with bad credit and in particular, buyers who have undergone bankruptcy who are cautious of additional lines of credit that may further impact their credit score or fear that rejection from lenders. Don’t fear rejection! You can qualify for loans to finance the car, truck, SUV, or van that suits the needs of you and your family. You work hard, bad credit shouldn’t stop you from enjoying a nice, safe and reliable vehicle. Finance a car today in [cf_geo return=”state” default=”Your State”] in just minutes!

Navigating Car Buying After Bankruptcy

Bankruptcy feel like a roller coaster. Once you’ve filed for bankruptcy, the next step is to begin to rebuild your financial stability. Financing a car is one way to rebuild your credit. Financing a new or used car after bankruptcy, unfortunately, can feel unattainable to many buyers. The good news is that there are loans out there for people who have undergone bankruptcy. While lenders may offer loans to buyers with a financial history of bankruptcy loans at different rates than buyers with excellent credit, there are financing options that can help finance a great vehicle without hassle. 

Pick the right loan for you

Picking a financing option takes some research and planning. Bankruptcy isn’t a financial death sentence, it merely requires some planning to navigate. Figure out how much you can comfortably afford in monthly payments for your new vehicle. Starting with a budget will help keep you on track to picking the right car and financing option that doesn’t have you spending more for your purchase than you can manage. Use a helpful online tool to calculate all of the perceived costs of purchasing a newer vehicle, including not only the cost of the car but also the interest rate and administrative fees that are associated with buying a car.

There are several key points to look out for in your auto loan. The first is your interest rate. With bankruptcy on your financial report, you probably won’t qualify for the best rates possible. In fact, a bankruptcy loan may even come with a 10-15% interest rate that is applied on top of the cost of the car. The interest rate is paid to the lender as a security for financing your car. If you can, pick the financing option with the smallest interest rate that you can find. This will help save you money on your auto purchase. Another key point is to pay attention to how long you borrow your loan for, or you risk paying more for a vehicle throughout the length of the loan. Pick a shorter loan if you can afford it. Many buyers try to save money every month by extending their loan across many years. This seems like a great idea, since spreading the total cost of the car across many months lowers what the buyer pays monthly. The negative side to this practice is that the loan accrues more interest, the longer that it takes to finish making repayments. This is how many Canadians end up making routine payments on a quickly aging car, for many years.

Consider Ways to Bolster Financing

There are ways to supplement the gap in your financial history. Consider finding a cosigner– a friend or relative who has good or excellent credit, to sign the loan with you. Lenders view loans with a cosigner favorably, because the cosigner has a positive track record of making regular payments on a debt to a lender. A cosigner also is responsible for paying off the loan should the borrower default on the payment for any reason. If you can manage your monthly payments, then you shouldn’t have an issue maintaining a good relationship with your cosigner.

Another way to improve your financing options is to make a big down payment on your car prior to financing. Doing this helps reduce the amount that you will borrow from a financial institution, therefore making you seem more attractive and less of a risk to lenders. An old car can be used as a trade-in to receive credit from a dealer to reduce the cost of your car purchase as well. Click to find an auto loan in  [cf_geo return=”state” default=”Your State”].

Clean Up Your Credit

The first step of cleaning and repairing your credit is to make yourself knowledgeable of your credit history. Take a few minutes to do your research online to run your credit history and see your credit score. Yes, your bankruptcy will appear, in fact your entire recent credit history will appear and you will be able to see open lines of credit and if they are up to date. You should look out for any misinformation or mistakes on your credit history. These mistakes can severely impact your financial healing process, and can be appealed and removed from your record.

Use your auto loan as a way to repair your bad credit post-bankruptcy. Once you’ve accepted a loan, it is imperative that you make your monthly payments on-time, in-full each and every month until the entire borrowed amount has been repaid to your financing institution. Chances are, if you’ve missed payments on debt before then you understand how negatively impactful this can be on your credit score. Missing even one payment can set you further back from your financial goals and rebuilding your credit score. On the opposing side, making your payments as quickly as possible can really help strengthen your credit history and rebuild your financial future. Click to see the financing options for people with a bankruptcy history.

Go for it, apply for financing!

Don’t let the auto loan financing process intimidate you. In fact, you can apply to see numerous loans that you qualify for, in just a few minutes. Answer short questions about yourself to see the loan options available to you in [cf_geo return=”state” default=”Your State”].

Do you meet these criteria?

1. Have a driver’s license
2. Can obtain car insurance
3. Make at least $450 a week

If you meet these three criteria, then you qualify for loans that will help you finance the car that you want! Click to apply.

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