Can You Apply for Auto Loans Right After Bankruptcy?

There is no point in hiding the fact that your credit score will take a serious hit owing to your bankruptcy. Even after your final discharge, you might have to spend a considerable amount of time to rebuild your credit score to the decent limits before you can start applying for big loans again. The bankruptcy history will weigh heavy on you. And you cannot hide it for some time to come. Applying for auto loans in the traditional methods may become difficult.

But the auto market is no longer what it used to be. Today, you can buy a used car with no credit check even after a few months of coming out of bankruptcy. These dealers do not look at your current credit score to approve your auto loan and just like bankruptcy laws, the financial schemes are designed to give you a fresh start.

How do car dealers with no credit check function?

Also known as buy here pay here dealers, these brands work in the risky debt market. In other words, they extend car financing to bad and no credit score holders in return of a comparatively higher interest rate on the net loan they give you. As evident, your current credit score or history will not matter. Your present income will determine the amount of loan you can apply for at the dealership and the car you can buy from their lot. Other schemes are similar to common financial institutions where you can take the auto loan for any number of years you want and make the payments monthly against the credit.

Your chance to rebuild your score

One of the ways to rebuild your credit score right after bankruptcy is to make timely payments on your existing credit. Buying buy here pay here trucks or cars not only enables you to procure easy car financing but this is also your opportunity to improve your score. The top dealers report your credit payments to the respective authorities who calculate your score. Over time, you can build your score faster as compared to the case where your monthly income was the only parameter feeding your score.

Pay as much down payment as you can

You can always pay a high down payment to increase your chances of loan approval with bad credit. But right at the back of bankruptcy, you might not be able to swing that much cash to buy a used car. Here again, the top buy here pay here car dealers with no credit check offer the opportunity of paying flexible down payments. You can pay an amount as low as $500 to get approved and take the rest as a loan. In short, such dealers have designed their model to cater to the financially strained customers. If you desperately need a car after coming out of bankruptcy, these are the places for you.