Many
people go through financial setback during the course of their life.
While some may suffer from a bad credit score, others become a victim to
bankruptcy. Usually, a person faces either chapter a 7 bankruptcy or a
chapter 13 bankruptcy. A chapter 13 bankruptcy is for debtors who can
repay a certain portion of their debt with the help of a repayment plan.
On the other hand, a Chapter 7 bankruptcy is useful for debtors who
possess little or no disposable income and wish to get rid of their
excess unsecured debts.
Many
people who file for bankruptcy think it is impossible to obtain
additional financial assistance. Misconceptions cloud their thinking and
it sways them from the real scenario. However, with the help of certain
guidelines and the right mindset, you can obtain an auto loan for
buying a car
Buying a Car and Bankruptcy: Common Misconceptions to avoid
1) Misconception: I will not be eligible for an auto loan after bankruptcy.
Reality:
Bankruptcy may be a temporary halt but it is not the end of your
financial journey. The common misconception is that a person suffering
from bankruptcy will not get approval for any loan. However, the reality
is different. A bad credit auto loan is the best option available to
individuals with bankruptcy. The probability of obtaining approval for bad credit auto loan
increases as the loan is designed for individuals with credit issues.
Thus, put your efforts in researching for lenders who provide bad credit
auto loans and getting your dream car will not seem like a distant
dream.
2) Misconception: Bankruptcy ruined my credit score. Improving it is a challenge.
Reality:
A credit score is made up of numerous factors such as the types of
credit, amount of your debt, credit history and payment history. The
situation of bankruptcy helps you to eliminate most of the elements that
create a negative impact on your credit report. Additionally, the
debt-to-income ratio of people after bankruptcy is better than the one
prior to bankruptcy. Therefore, obtaining an auto loan is a chance to
improve your credit score provided you make the payments on time.
3) Misconception: My purchase options are limited to used cars.
Reality:
While it is advisable to be calculative in making future financial
decisions, the options of purchasing the types of cars are not limited. A
person who recently suffered bankruptcy is open to purchasing new cars
as well as old cars. The best alternative to a used car is a
discontinued car model. Purchasing a discontinued car model helps you to
obtain a new car for a budget-friendly amount. Also, the car dealers
are eager to sell the discontinued car model to free their shelf space.
Therefore, a discontinued car model will help you stay in your budget
and allow you to get your hands on a new car.
Today,
bankruptcy does not carry the negative stigma that it carried two or
three years ago. Many lenders are aware that bankruptcy occurs due to
business failure, decrease in income, loss of a spouse or any other
unexpected crisis. Yet, misconceptions occupy the minds of people and
force them to avoid applying for an auto loan. However, with a little
market knowledge, enough courage and the right mindset, you can get one
step closer to the car of your dreams.
Applying for an auto loan after bankruptcy is not as difficult as you think! Apply with CarDestination.com and the guaranteed auto financing
expert will find you an affordable loan in no time. Get in touch with
the company today to bring your favorite car home. Apply for subprime auto financing today.
