A divorce is one of the most emotionally difficult experiences you can go through in your life. Not only does it wreak havoc on your household but it throws a monkey wrench into your finances.
Our Burford auto loans team are going to discuss how you can buy a car while going through a divorce.
Each divorce is different but these tips will help you get back on your feet financially.
How are the debts being divided post bankruptcy?
This is a key question because when you apply for a car loan, the lender will need to do a calculation based on your total income less any debts.
Lenders will usually not allow you to carry more than 40% debt-to-income so there must be a divorce settlement document that clearly states what debts you are responsible for and which you are not.
Are you required to pay child support or spousal support? If you are the lender will need to see how much you are required to pay and factor that into their calculations when trying to determine what is the maximum loan you can afford.
Assessing your credit
Along with reviewing your finances, the lender is going to review your credit score. To qualify for a prime rate car loan in Burford, you will need a credit score over 680.
When a relationship breakdown there are certain things that fall through the cracks and one of them is making payments on time. Usually, your credit score will drop due to missed payments.
Sign up for apps like Credit Karma and find out your current credit score. If you notice any accounts that are past due, you need to pay them up to date, even if your spouse is responsible for them. You do not want your credit score to drop below 680.
Opening credit accounts in your own name
You should take this opportunity to start opening new credit accounts in only your name. Most married couples have joint accounts but you need to start building your own individual credit profile.
Getting a car loan even if you have no credit or bad credit due to the divorce
There is a shortage of new and used cars in the current economy. You really cannot afford to wait for things to get better, so you will need to get professional help ASAP.
Fortunately, there is a resource right in your hometown that can help you. Find a local car dealership that helps people with credit issues like the one you are facing.
The dealership has relationships with lenders who cater to customers that are going through a divorce. Canada has a divorce rate of nearly 50%, so there is a large number of people who need these financial services.
The experts at the dealership will also be able to help you rebuild your credit. You will get through the divorce and come out better for it, you just need to follow the advice given from the dealership and get yourself back on a solid financial footing.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!