subject: Can I Get Loan After Recent Bankruptcy? [print this page] A recent bankruptcy can adversely affect the prospects of getting a loan. Most lenders shy away from giving loans to people who have filed for bankruptcy in the last seven years. A recent bankruptcy makes the credit score poor and therefore the chances of getting loans become bleak.
If you are going through a similar situation and want to take a loan for a car or home or some other need, first repair your credit score. Once you file for bankruptcy, you are considered a high risk borrower by the lending companies and therefore they will not prefer giving loans to you.
Only once you show marked improvement in your credit report, the lenders may take interest in your case. Therefore, repairing your credit score should be your top priority. This can be done in a number of ways.
1.Pay your bills on time
This would help to lower the interest burden that is incurred when bills are not paid within the stipulated time period. If you often forget the last date of your bill payment then putting reminders on your cell phone and desktop or auto payment through bank account might help.
2.Pay your credit card bills
The timely payment of credit card bills will help to improve the credit score.
3.Budgeting
Budgeting helps to keep debts low. You should make a budget for all your essential expenses and always keep some funds aside for emergencies.
Once you start following the above points, your credit score will improve. Moreover, if you were forced to recent bankruptcy due to reasons like medical condition, divorce, and loss in business, then discussing the same with the lender helps. If you are having a good steady income, then this will also help you to get the loan. There are several cases where people after filing bankruptcy, start afresh and do well financially. Some lending companies do not mind giving loans to such individuals.
Though it would not be quite easy to raise finances, but you must not give up hope. Talk to several companies. Carry your recent credit score card along with salary slip. Compare the interest rates and conditions of the companies that are willing to offer you a loan. The interest rates are generally higher for people with bad credit score and therefore you should be willing to pay anything between 3 to 6 percent higher than the market rate. Some companies have a clause regarding the revision of the interest rates after the set period, may be one year. If you pay the loan installments during this period on time, the company may reduce the interest rate on the loan.
To sum up, it is wise to use such options to take loans after recent bankruptcy.
