Home > Blog Posts > Discharged Bankrupt Car Loans
Discharged Bankrupt Car Loans
January 6, 2021● 4 minute read●
No one ever has plans or wishes to declare bankruptcy, but for some people, it is merely inevitable. Being bankrupt can affect a person’s life in unimaginable ways. One of the areas immensely affected by declaring oneself bankrupt is credit. Credit is directly related to your finances and financial situation, so it is no surprise that it could ruin your credit history. Bankruptcy usually lasts for three years after which you would be referred to as having been discharged from bankruptcy. Officially you be free but, unsurprisingly, applying for a loan might still present itself as a challenge. Not many lenders or financiers are willing to take a chance on people with a history of being bankrupt, especially if it is the first loan they are applying.
It is no secret that sometimes things can get out of our control. Everyone goes through bad times, even after doing everything right. Luckily, getting yourself discharged gives you a second chance at opportunities. Everyone deserves comfort, whether bankrupt or not, and one of those comforts is transportation. Transportation is made much more comfortable with a car, and even bankruptcy can no longer stand in the way of applying for a car loan. It does not have to be an eternal problem in the world of finances. It might be more challenging but not impossible. You can only be eligible for a discharged bankrupt car loan if you have officially been bankrupt and relieved of your legal responsibilities to the payment towards all your debt for at least one year (12 months). At this point, the mar on your credit history can last for as long five years or more. Most lenders will not approve of a loan for anybody still tangled up in a debt agreement of any sort. If you are still bound and obliged to carry out the terms and conditions of another debt or loan, there is no guarantee that you will not get in over your head with payments. Loans which are still active reduce your reliability as there is a chance you will have to take out a third or fourth loan to assist you to pay up the first and second.
Processes Involved in Applying for Discharged Bankrupt Car Loan
There are different options for lenders to choose from when looking to apply for a discharged bankruptcy car loans in Australia. It is advisable to do your research on those money lenders available. When you choose to use to at least one, you will have to submit an application form, whether it be online or physically. They will most likely want some form of identification and some personal details with confirmation of your address. They will look and probe into your credit history to determine the most suitable and appropriate course of action regarding your application. They will have to determine if the loan amount you are requesting for is doable in your unique financial and personal position. Just like any other loan, the interest rate depends on the on your lender of the financier of choice. Many lenders are also capable of tailoring the interest rate to suit your financial situation. Each person’s circumstances concerning their bankruptcy and reliability are different, and those differences reflect in the specifics of your loan. It is crucial to have a form of employment when applying to any loan, but this particular loan could stress your employment status even more than average. Proof of stable occupation and stable income is vital for the approval of your request. There might be some concerns about whether self-employed people can get a loan, the answer is yes. Self-employed people are capable of getting funded but the same rule of having to prove that stability of your job and income still applies. No one wants to give out money to someone who would not have a career in the next two months; that is bad business. Your loan contract will clarify many things like, as stated previously, the interest rate, as well as the payment plan. Your payment plan could be weekly, fortnightly (biweekly), or monthly. How often you make a payment could be a representation on the income rate, how much money you are predisposed to at those intervals.
Common Mistakes to Avoid While Filing for Discharged Bankrupt Car Loans
People discharged from bankruptcy might feel the need or tend to request a small loan the first time. It may sound safe and responsible or give off an impression of having a higher success rate than those to go for higher loans that first time, but it is only a misconception. Applying for small amounts leaves the opposite impression with lenders. Lenders will lean towards thinking you are irresponsible and untrustworthy. The lower the loan, the more it makes it look as though you are unable to take care of the necessities and funds needed for everyday life. It could give off an appearance of somebody living from hand to mouth, exhausting whatever money you make on unimportant ad unnecessary things.
In contrast, larger loans appear more legitimate and genuine. After all, if you can’t take care of such little amount on your current salary, what guarantee would they have that you would pay them back? Smaller loans also appear on your credit history, which has the potential to the turn into a ripple effect and affects future money lenders might be discouraged or pessimistic about lending you money. Please do not fall into the trap of asking for less when it is unnecessary.
It is always a good idea to consult a financial adviser or another professional in the field before filling out an application. They will advise you on the best route to take and ensure you do not make unobvious mistakes. They will also advise you on the best deals you can get to not go in unrealistic expectations, either too high or too low. If you will need anything during this journey, it is good advice.
Written by Jacaranda Team