After I entered the job force at 18, I had money problems for quite a number of years. I earned a decent income, but I lived paycheck to paycheck and just felt like I would never get ahead financially. One day, determined to get ahead, I decided to record every purchase I made for a month to find out just where my money was going. I learned a hard lesson that day that small purchases here and there throughout the month really add up. I committed to a much smaller budget and began stashing savings away. Then, I researched the world of investing and made a few strategic ones with some of my savings. I am now doing much better financially, and I want to help others who need it, so I am starting a blog. Come back often for money management tips and tricks explained simply!
If you wound up with tons of debt and had to file bankruptcy for help, you are not alone. Millions of people file bankruptcy each year, and it can be a great way to start over. But if you recently did this and now need an auto loan, you may be wondering if you will have problems getting one. The good news is that you should have no problem getting financed to buy a car, and getting a car loan might actually be one of the best things you can do for your credit score.
Tips To Get A Loan
Before you set out to get a loan after bankruptcy, you should do a few things:
Once you have completed these three steps, visit an auto dealership in your area. To improve your chances of getting approved, look for a dealer that focuses on giving loans to people with bad credit. A dealer like this will be able to get you approved for a loan. The interest rate on your loan might be higher than you expect, but at least you could buy a car.
How This Will Help Your Credit
Once you get approved for a car loan, you will be able to improve your credit score tremendously simply by making your payments each month. Every payment you make will help increase your score, simply because your payment history is worth 35% of your score. This is one-third of your credit score, which is why experts even recommend getting an installment loan if you want to improve your score.
As you can see, qualifying for an auto loan and making the payments each month solves several problems. It offers you a car if you need one, and it offers a great way to improve your credit.
What You Can Do If Your Interest Rate Is High
The downside to this is that you may have a high interest rate on your loan, and this is because interest rates are based on risk. People who have excellent credit always get the best rates, whereas people with poor credit get high rates. The good news is that you are not tied to this particular loan forever. If you can make all your payments on time and find other ways to improve your credit score, you could apply for an auto loan refinance in just one year in many cases.
If you can qualify to refinance your auto loan, you will end up with a loan that offers a better interest rate. This will save you money, and it will also offer a way to keep improving your score.
Getting an auto loan is not difficult after bankruptcy, but it may require a few extra steps. If you are ready to buy a car and are not sure if you would qualify, bring your financial paperwork and a down payment to an auto dealership and apply for a loan.
Share17 March 2017
