Canadians who want to buy a used car after bankruptcy have options available, but most of us do not know how where to go. We are going to show you what steps need to be taken when trying to get back on your feet, financially speaking.
Were you discharged from bankruptcy?
The first question we need to ask is when were you discharged from bankruptcy?
In Canada, you cannot assume any new debts until you have been officially discharged from bankruptcy.
So, we are working on the premise that you have been discharged from bankruptcy and starting to rebuild your life.
Rebuilding your credit from scratch
The bankruptcy will be on your credit report for the next seven years, so you need to start rebuilding your credit.
There are credit builder loans from organizations like Koho; you pay $7 per month for six months; this instalment loan will help you rebuild your credit score.
The amount is not important; it is establishing a track record of paying your debts as promised that matters most.
While using this credit-building loan, you can also apply for secured credit cards from Capital One and HomeTrust.
These secured cards are a great tool that when trying to rebuild your credit, just remember always to pay your debts as agreed and keep the total amount of debt you are carrying to less than 30% of the total credit available.
If you stick with this approach, your score will start to increase.
Making room in your car buying budget
You know how to rebuild your credit; the next thing you can work on is your budget. During the bankruptcy, the trustee would have you attend classes on basic finance, which includes budgeting.
The bankruptcy would have addressed your credit-related debts, so you should have a considerable amount of cash that can go towards servicing a car loan. Your car loan payment can easily reach $600 or more, and this does not factor in the cost of fuel or insurance.
Therefore, it would be prudent to allocate at least $1,000 per month from your budget towards paying the car loan to be on the safe side.
Where to Buy a Car after Bankruptcy in Canada
While the Internet might seem like a great option when trying to get a good deal on a car loan, your best option is to go through a local dealership.
A dealership is able to help you find lenders throughout Canada that are willing to do business with you.
Since you recently went through bankruptcy, some lenders specialize in this type of financing.
The dealership can get you a competitive interest rate and show you how to rebuild your credit so you can secure a prime interest rate car loan in the future. You have worked hard to overcome the challenges of bankruptcy, and buying a new car is a major milestone, be proud of yourself.
You should contact a dealership today and start enjoying the fruits of your labor.
Click here to get approved for your next car loan online today! we have a team of credit specialists ready to help you find a vehicle suited to your needs and will work with you no matter your credit score.
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