Bankruptcy Auto Loans
Nationwide Auto Lending writes consumer articles pertaining to the auto loan industry focused on helping customers to better understand auto loans and how they work.
Bankruptcy Auto Loans [Articles]
September 23, 2009, 7:53 pm
It's become easier for those that have bankruptcies to get auto loans too. Bankruptcies can happen due to a number of reasons. Many people including American carmakers are facing possible bankruptcies due to the current economic recession. In fact the big 3 car makers have asked the US Government for a bail out package of $34 billion which can increase further.
Reasons for bankruptcies
The other reasons for bankruptcies include divorce, death of an earning spouse, long term illness or hospitalization, loss of income and others. Bankruptcies can also happen due to foreclosure. Across the country foreclosure rates have risen steadily over the past year. Most loan officers are sympathetic, if you can explain them the reason for your bankruptcy. If you can prove that you would be able to pay back the auto loan, then you can also be given the bankruptcy auto loans. Pay back the auto loan monthly installment on time and you can improve your credit rating. You can slowly improve your credit rating over a period of 2-3 years. This will help you to get auto loans and other loans in the future at attractive interest rates.
Those in Chapter 7 and Chapter 13 bankruptcy can get auto loans
Banks and credit unions are willing to extend the auto loans to those that have bad credit scores. To apply for an auto loan they would require to get an "Authorization to seek debt" from their trustee. If during the bankruptcy procedure, your vehicle was reposed, you can still apply for a bankruptcy auto loan. But if you had vehicle repossession in the past 12 months due to non-payment of auto loans or car loans, you won't be able to take another car loan. Those that have garnishments and tax liens against them can also apply for auto loans.
Conditions for getting the auto loans
If you have an income of $1500 and above, you can apply for an auto loan. The requirement of a minimum gross monthly income can differ from lender to lender. You should also be able to prove that you have had steady and regular income for the past 12 months. There are a number of online auto loan calculators that you can use for calculating the loan amount that you can get. Use these loan calculators to estimate the amount of auto loan that you may get. You can also get online free quotes from lenders for the auto loans.
The interest rates
The interest rates for getting bankruptcy auto loans for those that have bankruptcies can vary. If you have had a bankruptcy, then you would have a bad credit report. The interest rate for auto loans for those with bad credit can vary between 10-20% interest rates. But for those that have good to excellent credit scores, the interest rates for auto loans can be 6-7%. The other factors that affect the interest rates for the auto loans include down payment for the car, the loan amount and the loan tenure.
