Car Loans After Bankruptcy - 3 Tips on financing your car with bad credit

If you have recently declared bankruptcy, you may wonder if its possible to get auto financing again. There are loan companies growing all the time that have new programs to help finance people with bad credit. An auto loan is easier to obtain financing for a personal loan or an unsecured loan because the lender can use the car as collateral against the loan in case the borrower ever fails or is not making payments of loan.

Here are some tips to help you in obtaining financing to purchase or refinance a vehicle after a recent bankruptcy.

1. Get sponsored to restore your credit - Get a new car loan can help you rebuild your credit when you make your payments on time. Once you have made payments on time for about 6 months or more, you should be able to refinance your car at a much lower rate. As you make your payments on time, your credit score will increase.

2. Buy Lowest Priced Car You Can - When financing a car after a recent bankruptcy, you can expect to see interest rates as high as 14-19% or more. It is not wise to buy a car that costs more than you need because, first, you have to pay such a high rate of interest on the amount you borrow on. If you want a more expensive car, wait until you have made payments on time for a year or two after your credit rating has increased. Then you should be able to get an interest rate of around 9-10% or less.

3. Get multiple offers - There are many online lenders who offer up to 4 offers from an application. Most of these loan companies will not even pull your credit with the initial application, they will simply ask you to describe your credit. This way your credit score will not drop from being pulled too often.

Source: http://EzineArticles.com/72252