How to Refinance a Car After Bankruptcy
After filing for bankruptcy, your credit scores will take a hit.
However, this will definitely not stop you from buying a car if the need is there.
But, many times people get taken in by car salesmen when they inform potential car buyers that they should buy the car at a high interest rate and then they can refinance it at a lower rate 12 months later.
However, you should not be taken in by this.
Coming out of bankruptcy takes time, patience and effort.
So, if the car salesman says something about refinancing the car after 12 months, he is basically trying to rush you into making the purchase.
And, unfortunately many people fall for this because they think that it is their only option.
It is only 12 months down the line that people realize that they have been lied to.
If you are thinking of buying a new car, the first think to consider is whether you are eligible for refinancing.
Many times, you may actually benefit by trading or selling your old vehicle.
It could be a better option.
This means that you will first have to determine the value of your old car.
When trying to figure out the value of car, you should look at a retail value.
This is the amount that a dealer will pay for the vehicle.
There are many websites that help people figure out the retail value of their vehicles.
In these websites, you will have to mention the make of the car, the model and also year.
If you car has any optional equipment, it should also be mentioned.
Then select either of the two options -- trade in or dealer retail.
This will give you the value.
There are some lenders who use the trade in value of a car to refinance it, while others opt for retail value.
It is better to use a lender who goes by the retail value, which is always higher of the two.
Once you know the value of your car, it is time to contact your lender.
At this point, as you have filed for bankruptcy, the lender may not be communicating with you.
However, get in touch with the collection department of your lender.
Then check what is the amount you still owe on your car.
From this amount, you need to deduct the retail value of your vehicle.
If the amount is less than what the vehicle is worth, then you will have plenty of options.
You should start by getting in touch with banks and credit unions.
They are the lenders who help ordinary people in refinancing their cars.
Most lenders will not refinance more than 125 percent of the either the trade in value or retail value.
In case you owe more on the car than what it is worth, then the lender will only refinance a part and you will have to come up with the remaining amount.
When you can selected your lender, just make sure that he reports your timely payment to the credit reporting bureaus.
This will help in improving your credit score and rebuilding your credit.
However, this will definitely not stop you from buying a car if the need is there.
But, many times people get taken in by car salesmen when they inform potential car buyers that they should buy the car at a high interest rate and then they can refinance it at a lower rate 12 months later.
However, you should not be taken in by this.
Coming out of bankruptcy takes time, patience and effort.
So, if the car salesman says something about refinancing the car after 12 months, he is basically trying to rush you into making the purchase.
And, unfortunately many people fall for this because they think that it is their only option.
It is only 12 months down the line that people realize that they have been lied to.
If you are thinking of buying a new car, the first think to consider is whether you are eligible for refinancing.
Many times, you may actually benefit by trading or selling your old vehicle.
It could be a better option.
This means that you will first have to determine the value of your old car.
When trying to figure out the value of car, you should look at a retail value.
This is the amount that a dealer will pay for the vehicle.
There are many websites that help people figure out the retail value of their vehicles.
In these websites, you will have to mention the make of the car, the model and also year.
If you car has any optional equipment, it should also be mentioned.
Then select either of the two options -- trade in or dealer retail.
This will give you the value.
There are some lenders who use the trade in value of a car to refinance it, while others opt for retail value.
It is better to use a lender who goes by the retail value, which is always higher of the two.
Once you know the value of your car, it is time to contact your lender.
At this point, as you have filed for bankruptcy, the lender may not be communicating with you.
However, get in touch with the collection department of your lender.
Then check what is the amount you still owe on your car.
From this amount, you need to deduct the retail value of your vehicle.
If the amount is less than what the vehicle is worth, then you will have plenty of options.
You should start by getting in touch with banks and credit unions.
They are the lenders who help ordinary people in refinancing their cars.
Most lenders will not refinance more than 125 percent of the either the trade in value or retail value.
In case you owe more on the car than what it is worth, then the lender will only refinance a part and you will have to come up with the remaining amount.
When you can selected your lender, just make sure that he reports your timely payment to the credit reporting bureaus.
This will help in improving your credit score and rebuilding your credit.
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