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Guelph Car Loan after Bankruptcy: Steps to Finding a Deal

Guelph Car Loan after Bankruptcy: Steps to Finding a Deal

Were you recently discharged from bankruptcy? If you were, let us congratulate you on overcoming one of the biggest financial challenges a Canadian can face.

 

There are many potential reasons why a person could go bankrupt, but you overcome them and want to get a fresh start. First things first is securing a Guelph car loan after bankruptcy.

 

While bankruptcy does remove your legal obligation to repay most debts, you are also going to experience some challenges as you proceed to rebuild your credit score.

 

Post-bankruptcy, your credit score is going to be very low, and the bankruptcy will stay on your credit report for up to seven years.

 

In Canada, the majority of us need a vehicle to get around, so if you need a car, then these tips will help you get a loan and start leading a better quality of life.

 

Staying on top of your credit report

 

Throughout your bankruptcy, you never used credit and paid for everything with cash. Your credit score is at an all-time, so you need to start rebuilding it.

 

  • Sign up for a secured credit card from Capital One or HomeTrust. These cards work just like a conventional credit card, but you must deposit cash which works as your credit limit. This is not to be confused with a pre-paid credit card.
  • Services like the Koho Credit Rebuilder program have a solution where you pay $7 per month for six months. Every month you make the payment as agreed, your credit score will start to improve.

 

Your repayment history is the biggest variable when trying to rebuild your credit; by making your payments on time, you will start to see your credit score improve.

 

Defining your car-buying budget

 

The car market in Canada has changed considerably in the last 18-24 months, thanks to Covid-19. When creating your car-buying budget, you need to have the right expectations.

 

  • The average car payment in Canada is $500/month, but that does not include insurance, gas, and maintenance, so you should plan to spend at least $1,000/month to be safe.
  • Since you are considered a higher-risk borrower, the interest rate being charged will be higher than someone with pristine credit. You may not qualify for a loan on a brand-new car; your best option may be to purchase a previously owned vehicle.

 

Generally speaking, lenders will not issue a car loan if your debt-to-income is more than forty percent of your gross income; the bankruptcy should have removed your consumer debt, so meeting this requirement should be fairly easy.

 

Where to get approved for a car loan after bankruptcy in Guelph

 

Do not bother with websites offering car loans online; they do not have access to the most preferential terms.

 

Call your local car dealership; they will be able to help you. The first thing the dealership will do is take the time necessary to understand your situation.

 

After taking stock of your situation, the dealership will connect with their preferred lenders and get you approved for a car loan today.

 

Stick to the tips provided by the dealership’s credit expert. You will be able to qualify for a prime interest rate car loan in as little as 12-18 months, but you need to make the first move by contacting them today.

 

We’d love to help you find a Guelph car loan after bankruptcy. Simply fill in the form below and we’ll get back to you ASAP or see our selection of used cars at our Burlington dealership. 

 

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    Categories: Auto Loan

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