Many people report feelings of relief after filing for bankruptcy and finally breaking free from the crushing cycle of debt. But when it is finally time to buy your next car, trying to find financing can resurrect feelings of trepidation and uncertainty. However, there are lenders and dealerships that specialize in auto loans for people with subprime credit. There are just a few things to keep in mind when it is time to start the subprime auto loan process.
A Fresh Start
Immediate vehicular needs do arise, but sometimes it makes more sense to let some time pass after your bankruptcy to allow your credit to rebound. You can make the most of this time by practicing healthy money management habits and saving the money you will need to make a down payment. Here are steps to take to prepare for your first car loan after bankruptcy.
- Check your credit score to know where your credit actually stands. It can be helpful to set goals, such as a 30 point improvement over a set amount of time.
- Take your time before going car shopping. Try to improve your credit score while you wait, as it is directly linked to what interest rate you will qualify for. The money that you save on interest will help you stabilize your financial position.
- Save for a down payment, which will help you get approved because it reduces the risk a lender has to take on in order to finance you.
- You may need a cosigner in order to get approved, depending on how damaged your credit is and how much of a down payment you have. A trade-in can also be put toward your down payment.
- Be reasonable. A subprime car loan is an opportunity to rebuild credit after bankruptcy. It is not the time to buy the fancy car you have had your eye on.
Getting Started Today
Financial experts agree that getting an auto loan is one of the top ways a consumer can raise their credit score. Drivers Lane can help you find a dealer who can work with your credit situation and allow you to buy a car, sometimes for even little or no money down. Fill out our fast and secure application today and you could be on your way to a new car and a new beginning.