Ontarians that were recently discharged from bankruptcy and need a Welland car loan can do it, but there are some important steps that must be followed. Our Welland auto loans team outlines what you need to do.
The first thing we need to address is whether you were officially discharged from the bankruptcy.
By law, you cannot take any new debts until you have the official discharge, so do not move forward until you are officially discharged.
Credit rebuilding 101
Your credit score is low; the fact you went bankrupt means your creditors have lost the money they were promised.
While you are getting a fresh start, the bankruptcy will stay on your credit report for seven years. Your credit score will not improve until you start taking proactive measures, starting by signing up for credit rebuilding solutions like those offered by Koho.
The credit rebuilding journey is going to take some time, but you need to start. You need to bear in mind when rebuilding your credit to pace yourself.
Your credit score will not shoot up to 750 overnight, but if you have a few open tradelines, which include secured credit cards and credit rebuilding products, you should see an improvement over the next 30-60 days.
Taking a closer look at your finances post-bankruptcy
We have addressed the importance of working on your credit score; the next thing you have to work on is your finances.
Do you have a defined budget?
One of the things you would have learned during the bankruptcy process is to prepare a budget.
You will need a budget in place that will clearly define how much cash you can put towards a car payment.
In Canada, the average car payment is around $500, but that is just a ballpark figure that does not consider the costs of owning a car.
Most lenders in Canada will not issue a loan if the debt-to-income ratio of 40%; the bankruptcy would have wiped out most of your debts, so you should have no issues being able to afford the car payment.
While you are budgeting for the car payment, you also need to make room for an emergency fund.
Housing costs in Ontario are quite high, so you need to have an emergency fund in place to protect you just in case your costs change.
Where to find a car loan after bankruptcy
You may come across websites that offer car loans after bankruptcy; while the offers on those websites may seem compelling, they are not a good option.
The best source of car loans post-bankruptcy is through a local car dealership specializing in securing this type of financing.
There are lenders who are going to give you a second chance, but you cannot find them without the help of your local car dealership.
Now that you know how to get a car loan after bankruptcy, you should contact your dealership today and begin reviewing your loan options.
The sooner you reach out to the dealership, the happier you will be, so pick up the phone and contact the dealership right away.
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.
For any questions or concerns, please don’t hesitate to contact us here!