Right Out Of Bankruptcy, Auto Loans Can Be Expensive - But You Can Still Get Them

Right out of bankruptcy, when you're trying desperately hard to rebuild your credit, about the last thing you want is to find out is that your car has given up on you. You feel that when your budget is impossibly stretched as it is, you just don't want the added burden of thinking about buying a new car. You also know that buying a car when you have the poor credit bankruptcy brings, will mean that you will qualify for about the most expensive rates that the lenders have. But it isn't as bad as it sounds. Bankruptcy auto loans aren't easy to come by. But you aren't all out of options.

The best interest rates you get when you have good credit usually hover around the 6% mark. Bankruptcy auto loans on the other hand hover around 23% mark. Your number one option here then is to go with the used market. For about $400 a month, you can probably get a really great used Corolla or Civic. What exactly is considered a terrible credit score these days?

Of all the people with credit scores below 620 who apply for auto loans these days, barely one in ten makes it through. Anything above 620 though, and your chances dramatically improve. As a side note, have you ever considered renting a car long-term? This isn't as ridiculous an option as it sounds. If you rent a car by the month, you usually get rates that are comparable to what you would pay with a reasonable financing rate on a used car. And the auto rental agency takes care of all the maintenance too.

The more you shop around for bankruptcy auto loans, the better your chances are of coming by something reasonable. Consider abandoning the traditional route for getting financing - which is at the banks or the credit unions - and consider the buy-here-pay-here option. This is where you walk up to a single-outlet dealership, pay the few hundred dollars they ask for as down payment and come in every week to make your payments. For bankruptcy auto loans, these are the places to go to. They will even report to the credit bureaus to help you improve your credit.

This past year alone, there were about 3 million cars sold this way. With bankruptcy auto loans, there are a few things that can help you win a lower interest rate. If you have lived in your current home for years, that's a sign of reliability, and they take notice that. They also take note of how long you've been in your current job and how many references you can quote.

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