We do not usually feel the need to brag, but we got someone a loan on a 2011 Mustang GT with Navigation right out of bankruptcy. Not only that, but we got that person approved for 4.9% on his auto loan.
Does everyone qualify for that type of loan? Heck no. But when someone can qualify, it is good to know that we can deliver.
How can you get a really good interest rate right after bankruptcy?
1. Loan structure (most important factor)
The auto loan needs to be attractive to the lender before they look at your credit profile. In the situation above, the customer had about a 25% down payment and the loan was fairly short term. You may need more or less down payment to qualify for that kind of rate, but at least we can get you there.
2. Affordability
If you cannot afford the payment, in the bank’s eyes, why should they give you a loan?
3. Previous comparable good credit
Not everyone with a bankruptcy has the same credit. What kind of borrower you were in the years leading up to your bankruptcy will play a huge roll in your loan options after the bankruptcy. For example, if you have never made a payment on a car loan over $300 per month, the auto lender might not help you get a $500 car payment.
4. Willing to buy brand new
Rates are usually a little better on brand new, even though monthly payments are usually higher. The lenders that offer “no down payment” loans right after bankruptcy do not usually like brand new vehicles because they take the biggest drop in street value when you drive them off the lot.
5. Willing to pay more per month
This kind of goes with Number 4, but it is important to understand. Even though you may be able to buy brand new, it might not be worth it to most people. It is not uncommon to have a $500 payment on a brand new car right after bankruptcy, even with a good interest rate. A similar car that is used might qualify for a $350 payment even though it is a higher rate.
How is this possible?
Remember, new cars are more expensive than pre-owned. And to qualify for a better rate, you are probably going to have to go with a short term loan. Those two things all by themselves make it so that the payments are usually higher on brand new vehicles right after a bankruptcy.
Another major factor that prevents most people with a recent bankruptcy from getting into one of the low interest rate programs is that since they recently filed bankruptcy, it might be hard for them to have a significant down payment saved up. Most people file for Chapter 7 Bankruptcy because they do not have enough money. The lender often asks the following question in these situations: If the customer has $XX,XXX down, why did they file for bankruptcy? It is a good question, and we will need to give them an accurate answer.
WA Auto Credit specializes in helping people with a recent bankruptcy obtain auto loans so that they can buy a vehicle through one of our dealers. If you are interested in getting an auto loan through one of our programs, please apply on our website, or call us at 888-300-3502. We would be more than happy to explain your options to you.
We have all done it: Buy something just because the monthly payment is low. It happens at electronic stores, auto dealers, and even late night infomercials.
There are so many ways to get credit cards and other lines of credit that it is unsurprising that so many people get in over their head. U.S. News & World Report put together a list of seven common financial mistakes. Among the mistakes they highlight is seeing the monthly bill as an indicator that something is in your budget.
Equating monthly payments with affordability: Far too many of us decide whether we can afford something based on whether we can manage the monthly payment. This is particularly true for homes, cars, and furniture. But just because we can handle a payment does not mean we can truly afford something. Monthly payments also ignore the true cost of ownership. A car, for example, costs a lot more than the monthly payment when you consider insurance, gas, repairs and maintenance. Instead of focusing on the monthly payment, separate needs from wants and evaluate how you might better use the money. If you still have consumer debt, for example, consider paying the debt off before buying something that will commit you to future monthly payments for potentially years to come.
Think about this for a second when you are buying a car. Maybe you can get approved to extend the term and lower the payments, but does it help you in the long run? Human nature takes over when we think about shortening the loan and paying a higher payment. That side of the argument may be that if you are willing to have a higher monthly payment, you could buy the car you REALLY want. $500 or $600 per month may be affordable today, but what if you lose your job or have unexpected medical costs? We are not saying that either option is better than the other, but make sure you think about the pros and cons before you sign on the dotted line.
The rest of the list:
1. Buying expensive mutual funds.
2. Neglecting credit scores.
3. Equating monthly payments with affordability.
4. Overpaying on a mortgage.
5. Missing good deals online.
6. Overpaying taxes.
7. Making minimum payments on credit cards.
The decision to file bankruptcy is a tough one both financially and socially so it is not to be taken lightly.
From a social perspective, most people are taught that a bankruptcy is an embarrassing sign of failure and filing for bankruptcy is something that should be avoided as long as possible. The bottom line is most people did not plan on filing bankruptcy. In fact, most people filing today had their life in order even one or two years ago. Whether it be the economy, a medical emergency, a death in the family, or some combination of factors, bankruptcy filings are very common right now.
From a financial perspective, a bankruptcy filing can stay on your credit for up to 10 years. A bankruptcy filing on your credit will affect your ability to get approved for an auto loan, home loan; and a bankruptcy can even affect whether or not you are given a job or an apartment to rent. Additionally, even if you are approved for a loan after bankruptcy, the bankruptcy itself can dramatically affect the interest rates you qualify for.
HOWEVER, all of the cons listed above can also be associated with bad credit in general. The big difference is that a bankruptcy gives you an end to the collection calls, credit card debt, late payments, and everything else that is discharged in your bankruptcy. Not only that, but there are a lot of loan programs available to most people with a recent bankruptcy that are not available to people trying to stay afloat with late payments, collections, and bad credit in general.
The decision to file for bankruptcy is actually very simple: Does your monthly income cover your monthly bills? If you cannot afford your debt, utilities, food, insurance, etc. then you might want to at least meet with a bankruptcy attorney to go over your financials.
If the attorney suggests you file bankruptcy, you need to decide to file a Chapter 13 Bankruptcy or a Chapter 7 Bankruptcy. In a Chapter 13, you enter a 36-60 month plan in which you pay a portion of your debt back. In a Chapter 7, everything you want to get rid of is wiped out (with exception of non-dischargable debts like student loans and child support). Many people unfamiliar with bankruptcies think that a Chapter 13 is better than a Chapter 7 because you are paying some of the money back. THEY ARE WRONG.
In a Chapter 13, you cannot take out a major debt without permission from the judge or trustee. Additionally, you still have to qualify for the loan. If you want a Chapter 13 Auto Loan anytime you are still in the 13, it is real pain. However, if you filed a 7, your bankruptcy is over about 90 days after you file and you have many loan options available to you as soon as after your 341 meeting of creditors.
Many people who file a 13 end up dismissing it due to non-payment. Then, they either refile another Chapter 13, or they file a 7 at that point. Guess what? Now you are considered a double bankruptcy. Your credit reports the number of times you file bankruptcy, not the number of times you go through with it. A double bankruptcy will limit the credit and loan options much more than just a single filing. Additionally, because of the refile risk, the lenders that will approve you for a Chapter 13 Auto Loan are not as numerous as the lenders that will do a Chapter 7 Auto Loan.
The decision to file bankruptcy is not to be taken lightly. However, with many years of helping people both before and after bankruptcy, it is much easier to rebuild bad credit after a bankruptcy than before. That being said, none of us here in the WA Auto Credit office are attorneys, and our thoughts and opinions are not to be interpereted as legal advice. PHEW! The disclaimer is over.
If you are considering filing for bankruptcy, consider contacting a bankruptcy attorney right away. The sooner you start, the sooner you are done and can start reestablishing your credit.
Over the years, we have run into literally hundreds of customers that have asked us if they should go to a payday loan company in order to have more money down for their car purchase.
For the vast majority of people, it is a bad idea. You might as well be putting the down payment on a credit card. Taking out more debt in order to get a loan doesn’t sound like a surefire success plan when it comes to rebuilding your credit.
I did have a customer once that it sort of made sense for.
Her name was Linda. She had a long term job, and was a single mom.
Linda’s credit was shot because of a divorce, and her bank account was small because of her kids.
Linda had an old Ford Taurus that reliably got her to and from work every day. That was until her car got hit by a drunk driver. Thankfully, neither Linda nor her kids were hurt. However, her car was totaled and she only had liability because she was trying to cut back on bills and it was an older car.
Linda needed a car, FAST, and while she waited for the drunk driver’s insurance to work everything out with her lawyer, she had no way to get to or from work. Now, it was obvious to everyone that a pretty large settlement would be coming to Linda from the other party in the accident. The only issues were how long the wait would be and how much she would get.
Linda came up with the idea to get a 100 day loan from a payday company by calling 877-793-5212. She did not get crazy with the loan amount. I think she only borrowed $1500. With the $1500 down, she was able to buy a vehicle that was reliable and got her to work while the settlement was worked out. She paid the loan back, got her settlement, and paid her car off in full. No more payments.
One thing she does do now, though, is keep full coverage insurance on the car.
Many Consumers that could qualify before for auto funding are now being turned away from conventional lenders. Many are reverting to the internet for research and auto finance options. Online lenders offer a variety of loan options including products allowing you to purchase a new or used vehicle from a franchise and refinance products giving you the opportunity to refinance an existing loan and in many cases, lowering your monthly payment.
Anyone who has purchased a car in the past knows the normal routine. You find a car you really want at a dealership. You complete an application with the salesperson. Then you get carted off to a finance office where the finance manager tells you what your interest rate and payment is, what type of down payment the lender wants and when your first payment is due. In many cases, all are not what you expected. Online car loans put you, the customer in control. From the time you complete a simple application to the time the lender approves you and gives you the finances to purchase a car is short and you are in control. Be aware of some online lenders that “force” you to go to a particular lender. Check around for aAffn online that allows you to shop at whatever dealership you want.
If you have had some credit problems in the past, all is not lost and the internet is a good place for you as well. Even missing or being late on one payment has forced many consumers into a lower credit category with most lenders. One thing is for certain, you need to know how much you can afford and what you are willing to spend before you ever step foot in the dealership. If not, you will end up paying more than you want.
Here are a few things to consider when shopping online for a car loan:
Research: Make sure you do your homework. Many online company look like they can help but make sure you choose an online company that is an actual lender. An easy way to figure this out is if they have the word “lender” or “lending” in their name. You want to deal directly with the lender so you cut out the “middle man” getting you a better deal.
Options: Make sure you deal with a lender that gives you options. Whether that means you can be flexible on the terms (how long you finance it) or you have control on where you can purchase your vehicle, these are all important pieces and ones you will want to control.
Control: Going online and finding your auto loan puts you, the consumer, in control of the car buying process. Financing a vehicle is the second largest finance transaction most of us will conduct (behind only our house) so you owe it to yourself to find the best deal possible.
The internet is a great way to find affordable car loans and gives the consumer total control of the finance process. To find out more information about online auto loans, visit OpenRoad Lending.
Until recently, we were unable to help people in an Open Chapter 7 Bankruptcy obtain an auto loan BEFORE the 341 meeting. Well, things change.
Our main bankruptcy auto lender now lets us do open chapter 7 auto loans immediately after the filing date, as long as you did not file Pro Se (as long as you have a lawyer do your filing). The program also allows $0 down to those who are approved.
Additionally, we now have a lender to help self employed people in a Chapter 7 obtain an auto loan as long as they can provide the last 3-months business bank statements showing a positive cash flow.
Our loan programs are improving every day. If you have a question, call us at 888-300-3502 so we can help you get your best loan.
When debts are overwhelming, there may be only one alternative, which is to file for bankruptcy. Many defaulters choose to file for Chapter 7 Bankruptcy. This chapter involved selling all your non-exempted assets which will ultimately be an effective way for you to pay off all your existing debts. This chapter is supervised by the authority and the authority will appoint a trustee to liquidates the non-exempt assets owned by the defaulter and distributes between the creditors. Chapter 7 Exemptions refers to assets that the creditors cannot touch when chapter 7 bankruptcy is filed. Although chapter 7 is the favorite method of bankruptcy, with the law of exemptions, a debtor could effectively reduce your personal damage and will be able to keep some of their belongings.
The debtor keeps the property that he is allowed to keep. This list will be provided in the Federal Bankruptcy Code. All the property of the debtor will be divided as exempt or non-exempt once the trustee files a property exemption report. In some states, the exemption laws can be different but the basic structure of the law should be the same.
Debts that are classified as secured debts will be paid first. As for debts that are unsecured, there are possibilities that the creditors may not get the money in full. The trustee will pay the right creditors in the right amount. To get bankruptcy chapter 7 exemptions, the debtor must file the case in the state where he/she resides for a period of 730 days before filing for this type of bankruptcy. Or the debtor may also file the case in a state where he/she has spent most of the 180 period prior to the 2-year period.
Federal exemptions may also be provided including retirement benefits, death disability benefits, survivor’s benefits and miscellaneous. Remember that in some states, not all the benefits are available.
Yes, bankruptcy is not a good alternative and worst still, your credit score will drop a lot because of it. Not only you will lose all your personal belongings and you need start a new leaf, both personal and business wise. Always consider other options before you look at bankruptcy.
Unfortunately, if you are in the dired situation, then get to find out more about bankruptcyChapter 7 Exemptions that can help reduce your loss and get to pay off your debts as soon as possible.
We at WA Auto Credit are always looking for new lenders to work with in order to better serve our customers. Recently, we were able to add Tidewater Motor Credit to our long list of available lenders.
Tidewater is a lender that specializes in helping people with a recent bankruptcy. In some ways, they are similar to Prestige Financial Services. However, in other (very beneficial) ways, they are very different.
Tidewater Motor Credit will consider Self Employed applicants with a recent bankruptcy. Tidewater requires 3 months business bank statements with positive cash flow and no NSF items, but it is a better option to many self employed people since Prestige does not consider self employed income.
In addition, if you filed bankruptcy as a homeowner, and you are going to wait for the foreclosure process to finalize before you move, Tidewater may be an option for you. Prestige Financial requires that your living situation be stable (i.e. in your new home, and not waiting for foreclosure).
These two changes are very important and we are excited to be able to help our customers better than ever. If you would like to find out more about Tidewater Motor Credit, or any of our other bankruptcy auto loan programs, contact us right away.
Sound familiar? Maybe not to you, but we hear it often. At WA Auto Credit, we help people with bad credit get approved for an auto loan to buy a car through one of our auto dealers. Obviously, if you have good credit you can pretty much buy whatever you want. However, if you have bad credit, your options are usually a little limited by the auto lender. Read More…
