Here are some things you can do before applying for a loan after bankruptcy that could improve your chances of being approved.
First, do what you can to improve your credit score. This is very important because most lenders will look at your credit report when deciding whether or not to give you a loan after bankruptcy. This is true for any kind of loan after bankruptcy, whether it's a loan for a car, a regular home loan, or a personal loan.
So how do you get your credit score higher? There are several ways to do it. One way is to get rid of any negative information that is wrong or old from your credit reports. You could also open some new accounts and pay them on time over time. There are more ways to improve your credit score, but I don't have room to talk about them here.
Second, if you want to get a loan after bankruptcy, you will need to know which lenders to go to. For example, if you try to get a loan from a lender that doesn't work with people who have recently filed for bankruptcy, you never had a chance.
So how do you figure out which lender to go to? Ask questions. This is very important if you want to get a loan after filing for bankruptcy. How do you know what questions to ask? Even though there are many, let me give you two examples:
- Do you look at applications from people who have been bankrupt?
Most likely, the lender will want to know how long ago the bankruptcy happened, if it was discharged or dismissed, etc. If the lender thinks about giving you a loan after your bankruptcy, they will want to see this information.
- What are your rules for who can apply?
Most lenders have minimum requirements that loan applicants must meet before they can get a loan. For example, if you file for bankruptcy and then try to get a home loan, the lender will probably set a minimum credit score, a minimum debt-to-income ratio, etc., that you need to meet in order to get the loan. Before you apply for a loan after bankruptcy, you need to find out what the minimum requirements are.
Lastly, once you've improved your credit score and found a lender who will give you a loan after bankruptcy, you'll need to negotiate the terms, such as the interest rate and how you'll pay back the loan.
costs, down payment, and so on.
When it comes to getting a loan after bankruptcy, this is where a lot of people get taken advantage of. Some lenders will act like they are doing you a "favour" by piling on a lot of interest and extra finance charges on top of the loan. Depending on what you're financing, this could add $100s or even $1,000s to your loan after bankruptcy. In After Bankruptcy Credit Solutions, I talk about specific things you can do to stop lenders from taking advantage of you.
Now you know what to look out for once you've found a lender who will give you a loan after bankruptcy and what steps to take before applying.
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DISCLAIMER:
This information is only meant to give you a general idea of what is being talked about.
This information is given with the understanding that neither the publisher nor the author are giving legal, accounting, or other professional advice. If you need help from a lawyer or someone else with specialised knowledge, you should hire a professional.
Neither the publisher nor the author will be responsible for any loss or damage caused by the information in this book. This includes, but is not limited to, special, consequential, incidental, or other damages.
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