Have you filed for bankruptcy in the past? If so, you know how difficult it can be, both financially and mentally. You feel embarrassed and uncertain about your financial future. Especially when it comes to securing a loan. After all, who wants to lend money to someone who’s filed for bankruptcy?
At My Ride, we specialize in previously bankrupt customers. Why? Because we understand that people make mistakes. One financial misstep should not stop you from doing regular things in your life, like financing a vehicle.
If you’ve filed for bankruptcy and want to apply for a car loan, the most important thing to remember is that it is possible. You have options, and we want to help.
Here’s how to get a car loan with us after bankruptcy.
Pull Your Credit Report
Don’t avoid it. Sure, you know it’s not going to be flattering but the reality is, a lender is going to pull it regardless. So it’s best to know exactly what it says. It won’t cost you a thing, either; you can pull your credit for free once a year.
Once you’ve pulled your credit report, pay close attention to any auto loans you’ve had in the past. Car loans are weighted more heavily when you’re applying for new vehicle financing, so a history of timely payments during and after bankruptcy can have a positive impact. Even if the rest of your credit report isn’t so great.
Establish a Budget
Before you apply for a car loan, make sure you’ve established a payment plan you can afford. Calculate not just your vehicle payments, but other costs of ownership including insurance, maintenance, and registration fees.
The general rule of thumb is you shouldn’t pay more than 15% of your monthly income on your car payment. If you can manage to pay less than that (and with us, that’s extremely possible), you should. Less is more in this case.
Save for a Down Payment
The bigger your down payment on a vehicle is, the more likely you are to be approved for a new car loan. However, don’t get discouraged if you’ve only managed to save a couple thousand dollars. It’s a start! Trading in an existing vehicle can also help reduce the overall cost of a new vehicle, in that it acts as a down payment if you don’t owe anything on it.
Choose a Flexible Lender
Anyone with a bankruptcy in their past knows how difficult banks can be to deal with. They don’t trust you and they can be unwilling to help. If they actually do approve you for a loan, it’s usually at an impossibly high interest rate.
At My Ride, we don’t need to deal with the banks.
We have been an established auto financing institution in Canada for over nine years. Thanks to our success, we’re able to use our own money to approve and finance our customers. So you can skip that judgmental visit to the bank.
We have a long history of helping bad credit customers get new car loans. In fact, we’ve helped over 30,000 people secure affordable loans in across Western Canada. We specialize in the particular needs low credit and bankruptcy customers have, and we know how to work within your means.
Make Your Car Payments on Time
Auto financing is the first step to regaining your financial independence. But only if you make your car payments on time. In doing so, you show lenders your worth lending money to.
According to Equifax, one of Canada’s two major credit bureaus, people who take out an auto loan after filing bankruptcy are 62.5% more likely to improve their credit score than those who do not. In addition, Equifax found that of those who took out an auto loan in June 2010, more than 25% improved their credit score by 100 points or more by June 2013.
That is an incredible jump in just one year. The future is brighter than you think!
Bankruptcy Doesn’t Define You
Financial hardships are a part of life, and sometimes the best decision is to file for bankruptcy. That doesn’t mean that after you do, you’re limited to a life with no financial options. You’ve beaten yourself up enough. It’s time to move forward.
We work directly with over 20 vehicle manufacturers and have one of the largest inventories of new and pre owned vehicles in Canada. Finding a vehicle you love is the easy part. Now, let’s help you get into a new car on a payment schedule you can afford, and put together a plan that’s going to help your financial situation moving forward.