A bankruptcy filing can make getting a loan seem impossible. It can feel like no lenders will even touch you for years to come. Fortunately for you, this is not true. Getting loans after bankruptcy is very possible, and we are going to show you how.
Take a look at what assets you can leverage
The easiest path to getting a loan after a bankruptcy is to look at what you already have. Your home and car, for example, are great assets that can be used as collateral for a loan. Secured loans such as these are very attractive to lenders, because they show that you are very serious about paying them back.
Improve the parts of your credit history not related to your bankruptcy
As you know, a bankruptcy filing will seriously damage your overall credit score. However, a bankruptcy does not automatically drop your credit score. There are still many other factors that will affect your credit rating, and you need to do whatever you can to make the most out of every last one of them.
For example, having a credit card that you pay off regularly will help your credit score a lot, so be sure to get one if you don’t already have one (even with a bankruptcy, you should be able to get a secured credit card, because they are backed by your own money). Maximize your credit limits by requesting credit line increases. Also, be sure to dispute any negative information on your credit report that is incorrect, because the removal of even a single negative item can improve your score.
Prepare a detailed explanation
There is a reason that you filed for bankruptcy. You can substantially increase your chances of getting a loan thereafter if a potential lender understands why you had to file in the first place. In addition, make sure to show the lender how you intend to pay back their loan based on your current financial situation.
Only work with a live person when applying
An automated system won’t understand or care about any of what we discussed in the last section. Instead, it will make a quick and decisive determination based on a very simple algorithm. Working with real people substantially increases your chances of getting loans after bankruptcy. As such, it is a great idea for you to call the lender and apply over the phone or in person.
Get your ratio right
If you are loaded with debt, then you are not likely to be able to pay for an additional loan. As such, it is important that you do what you can to lower your debt to income ratio. Generally speaking, you should try to get your total monthly debt expenses below four tenths of your total monthly income.
Avoid trying to work with banks
Banks are the least likely to approve you for a loan at any time; this makes them awful lending resources for those who need loans after bankruptcy. Instead, do not even consider a bank to be a viable lending resource. There are other lending institutions out there that are much more amicable towards potential borrowers who were forced to file for bankruptcy.
Bankruptcy does not have to be a financial dead end
You can still obtain a loan after you have already filed for bankruptcy, so do not let it discourage you from applying for and finding your next loan. For more information about getting loans after bankruptcy, contact Fast Access Finance. Our team of loan experts that can guide you in the right direction.