How to Qualify For Post Bankruptcy Loans
You may be feeling a little overwhelmed after you come out of bankruptcy. You are probably wondering where to turn, if anyone will loan you money, what type of loans you can qualify for, and more. The answers to these questions are foremost on the mind of each person who has a bankruptcy proceeding discharged. The fact is, by filing bankruptcy, you have caused a notation to be stamped upon your credit file that can take up to ten years to remove - and you will have to put some effort into making yourself appear to be a worthwhile borrower again before you will qualify for a post-bankruptcy loan.
Although you now have a slate that is wiped clean of debt, lenders also know that you are willing to forget about your debt entirely when you file bankruptcy. You can take a few steps leading up to borrowing your first post-bankruptcy loan that will make you look like less of a risk to potential lenders.
How To File For Chapter 7 Bankruptcy
Small Steps To Good Credit
Begin your quest to show your new responsible side by obtaining at least two secured credit cards. A secured credit card issuer will grant you a credit line equal to a deposit that you allow the to hold. This card will report to the credit bureaus just the same as other credit cards, and you can add points fast with proper usage. For example, if your credit line is 00 on your secured credit card, charge no more than 0 and pay off all of the balance each month other than 0. This is a great way to demonstrate your newfound ability to manage money.
Tips From The Pros
Establishing both a checking account and a savings account is vital to looking like a good borrower. Never overdraw your checking account, and make timely deposits to your savings account - even if it is just a week. By having these accounts, you show potential lenders that you are looking out for your financial future, which is a cornerstone of being a responsible borrower and good customer.
Do not expect to qualify for a huge loan when you are fresh out of bankruptcy. Most post-bankruptcy loans start out at 0 and may be written for as much as ,000 - and are short term loans usually requiring total repayment within one to two years after you receive the proceeds. Most lenders that accept you as a borrower will use your first couple of loan products to test your money management skills and responsibility in repaying them. They will not usually go out on a limb to grant you loans larger than ,000.
Cosigner Improves Chances
You can improve your chances of approval for your post-bankruptcy loan if you have a cosigner who has established good credit and is willing to sign with you for your loan. Your cosigner would become liable to the lender if you fail to honor your end of the bargain.
Online lenders have a greater approval rate than traditional brick and mortar lending institutions due to competition online and a saturated lending environment. Online lenders will also have the added convenience of totally electronic application processes over a secure website.
How to Qualify For Post Bankruptcy Loans
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