Why Post-Bankruptcy Personal Loans Are So Accessible

It is understandable that people would think the last applicant a lender is going to approve is one that has only recently come through bankruptcy. No-one can be faulted for expecting it to be so, but the simple truth is that post-bankruptcy personal loans are not very rare at all.

Many lenders recognize the wide variety of reasons behind seeking bankruptcy, with bad luck one of the most common. Many bankruptees are honest borrowers that were caught out by economic circumstance, so as long as their situation has improved there is no reason to reject their application.

With this in mind, the chances of bad credit borrowers getting loan approval with poor credit histories are quite strong. After all, the bottom line is that any applicant seeking a personal loan needs to be able to make repayments over the duration of the loan. Therefore, credit histories are not really that important.

Bankruptcy: The Consequences

It may seem that filing for bankruptcy is the only practical solution to financial problems, and in certain cases this is certainly true. But there are consequences to making such a move when it comes to rebuilding your credit reputation. Without doubt, getting a post-bankruptcy personal loan is a useful way to begin that rebuilding work, but the terms will not be ideal.

The image that bankruptcy has is chiefly negative, though lenders will often recognize there was no alternative action to take. But they do get nervous when considering loan applications from bankruptees. After all, bankruptcy means that debts were written off but never fully repaid.

Seeking loan approval with poor credit histories is one thing, but with a proven history of escaping debt repayments, some lenders apply very strict terms to any new personal loan so as to cover the increased risk of default.

Establishing An Ability To Pay

The key to establishing an ability to make the required monthly repayments is to show that your source of income is dependable and your existing debt commitments are low. It is with the latter issue that those applicants seeking post-bankruptcy personal loans have an advantage over regular applicants.

Bankruptcy basically means that all existing debts are cleared, whether a percentage of that debt is paid or not. But while there may be some stigma over the unpaid share of the debt, the fact remains that these applicants have no debts to their name. And with no debts to worry about, the debt-to-income ratio is very strong, so getting loan approval with poor credit histories becomes easy.

With regards income, the applicant needs to show that they have a full-time job, and have held it for a minimum of 6 months prior to submitting the application. This is a straightforward requirement for most personal loan applications.

What Terms Should Be Expected

The terms that come with post-bankruptcy personal loans cannot be expected to be great. However, there are some factors that, if addressed, can help in getting the green light. For a start, your status as bankruptee will mean a higher interest rate is charged, but keeping the size of the loan application down can counter the over-expense.

Lenders place a limit on the loan sum available to bad credit borrowers and will expect collateral to be provided in exchange for approval with poor credit histories. Collateral needs to match the loan itself, but when seeking an unsecured personal loan, the limit can range from $5,000 to $10,000.

Also, getting a cosigner – someone willing to guarantee monthly repayments will be made – is another way to ensure approval and keeping the interest rate down.

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Navigation After Financial Closure – Bankruptcy Personal Loans

Bankruptcy has a stigma attached to it that is hard to eradicate. Is that what you really think, then you need to rethink. Just because you have filed for bankruptcy does not mean you do not have a right to a solid financial status again. Bankruptcy is as much deserving of a personal loan for refinancing, consolidation of debts, mortgaging or any kind of personal loans. However there is no doubt bankruptcy is not the most wanted thing on your credit report. The aftermaths of bankruptcy are many and they can stay to as long as ten years. But still the changing trends have given way to a more lithe and sympathetic approach towards bankruptcy personal loans.

But you have already heard enough about getting bankruptcy personal loans. There are enough people who have been advertising for bankruptcy loans therefore it becomes highly bewildering whether it is possible to have a bankruptcy personal loans or not. Bad credit, no credit has still got an option but what about the condition where the credit is completely damaged. Bankruptcy is one such stipulation. There are chances that the bankruptcy loan offer might turn out to be a scam. You have to shop carefully before pouncing on a particular bankruptcy personal loan. There are very few bankruptcy personal loans that are actually viable. But this certainly does not mean that the market is deprived of any lenders whatsoever for bankruptcy personal loans.

As a bankrupt, you must understand that finding a loan immediately after bankruptcy is frequently unworkable. Bankruptcy personal loan lenders usually want to see that you have spent a minimum of two years after your bankruptcy in improving your credit status rather than borrowing more money. However, I must add that there is still scope for you to have a bankruptcy personal loan within a year of your being declared a bankrupt. You might be surprised to know that some people have managed to get a bankruptcy personal loan even one day after a bankruptcy discharge. You are required to know a few things that are essential for your path to credit recovery and access to your very own bankruptcy personal loan.

First and foremost try to pay on time on the items that were not discharged in bankruptcy like home and car. Doing timely payments on at least some of the items of credit will certainly go a long way in improving your credit status. The next good thing to execute will be to limit your credit limit on other loans such as credit cards and bank loans. This is important because too much credit will go against you in the bankruptcy loans market. It will be difficult for you to get bankruptcy personal loans with too much revolving credit like credit cards. Your debt-to-income ratio will play a momentous role in determining your ability to repay your bankruptcy personal loans.

It is important for you to realize that all the necessary documents should be organized before you apply for bankruptcy personal loans. Documents such as pay slips and tax returns are generally required to establish your capability in repaying the loan. The information provided on your credit report will be checked for accuracy. You must avert from giving any information that can be disputed. Removal of any inaccurate information will certainly provide a favourable debt to income ratio and make you qualify for bankruptcy personal loans easily.

A person beseeching bankruptcy person loans will be offered a sub prime loan also known as B, C, or D loan. This grading implies how lenders rate your loan application. The loan applications are graded from A to D in the order of decreasing hierarchy. Grade A application gets the best interest rates. D rating implies bankruptcies or foreclosure on their credit report. Remember that bankruptcy personal loans are usually small and taken to re-establish credit. The interest rates on bankruptcy personal loans are conventionally, higher than A grade loan applications. But do not let the loan lender bait you into giving astronomically high rate of interests, just because you have filed for bankruptcy.
Bankruptcy personal loan can be taken for any reason like education, home improvement, and medical costs. Taking bankruptcy personal loans and making regular payments will unquestionably improve your credit status. Usually the loan lender won’t be very concerned about the reason for which you have applied for a loan. All he will be anxious about is your status as a loan borrower. You can gain financial freedom by having the perfect personal loan after bankruptcy. It will not only furnish you financial freedom but also provide you the confidence to lodge yourself again in the loan market.

With 1.6 million bankruptcies a year you are probably not the only one with this problem. Applying for a personal loan after bankruptcy can be a very demanding experience. It has already been exhausting for you, the whole bankruptcy process. But a little bit of patience will certainly go a long way in germination bankruptcy personal loans for you. Bankruptcy can not be regressed but taking bankruptcy personal loans will certainly open more vistas for you in the financial context. The ramifications of bankruptcy are far reaching. You did not choose to be bankrupt but you can certainly rebuild your life after that. Bankruptcy personal loans are certainly well equipped to traverse your financial distress.

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