Car Loans after Bankruptcy - How to Negotiate the Best Deal

June 30, 2008

A car loan after a bankruptcy is one of the easiest types of secure
loans to get. Negotiate the best deal by taking control of your financial
situation. With so many lending options available, you can choose your
lender. Start by tidying up your credit report. Then, look for car
financing before you start shopping. Not only will you get a good rate, but
you can negotiate an even better price for your new car.

Be Proactive In Securing Financing

Dont fall for dealership financing targeted for those with poor
credit. Often times you will get stuck with a high rate loan and a high
costing car. Instead, be proactive about securing your financing before you
shop for a car.

This way, you have the most options on where you want to purchase a
car. And you can get a better price because you have cash. They will
never know you have a bankruptcy in your past.

Straighten Up Your Credit Report

Make sure your bankruptcy has been completely settled before getting a
car loan. You can get a free copy of your report online to check that
all qualifying accounts have been closed. Also verify that your payment
history is correct.

While you are looking at your credit report, you may also want to look
at your FICO score. With a recent bankruptcy, you can expect your score
to be in the low 500s. After two years though, you can have a score
over 650, qualifying for market rates.

Increase Qualification Factors

Even with a bankruptcy, you can lower rates with several factors. A
down payment of 20% or more is a good start, so is having little debt and
cash reserves in the bank.

You can further reduce your rates by being selective with your terms.
Adjustable rates are usually lower than fixed rates loan. A three year
loan will also have lower rates than a five year loan.

Search For The Right Lender

Searching for the right lender will also help you save on loan costs.
Compare rates and fees based on loan quotes. Car loan broker sites can
help you analyze multiple offers side by side.

View our recommended
Car Loan After Bankruptcy lenders or view all of our Recommended Auto Finance Lenders Online.

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