Filed for Bankruptcy? Car Loans in the Aftermath

Getting a car loan despite bankruptcy is possible; here is what you need to know about bankruptcy car loans.

A bankruptcy can show up on your credit report for as long as 10 years beyond the date of discharge, and it's especially important to make sure you have a copy of your credit report after the bankruptcy has been discharged. It's not uncommon to find accounts that are reflected incorrectly on your report, and it's important that you see and work on correcting this before you start applying for auto loans.

You will find lenders who are willing to offer you a credit loan even with bankruptcy, but the caveat to this will be that you can expect a higher interest rate. The lenders want to ensure they are still going to make money even if you default. A higher interest rate allows the lender to make more money each month, even if you end up defaulting on the loan.

Since you've had a bankruptcy, the lender will likely ask for more money down than usual. It's a good idea to plan ahead for this and save at least 20% of the price of the car as a down payment.

After you've had the auto loan for some time, usually a year or more, you may be able to refinance the original high interest loan for a lower one. Planning for the future will help you rebuild your credit more realistically.