Post Bankruptcy Personal Loans: Fast Approval Despite Bad Credit Histories

There is a school of thought that bankruptcy is effectively the end of any kind of credit deal. Traditional lenders certainly are reluctant to lend money to anyone who has been declared bankrupt at least 2 years prior to an application. But it is possible to get post bankruptcy personal loans.

The logical behind the thinking is fair, with lenders entitled to be cautious about approving applicants seeking approval with poor credit histories, but it is worth noting that bankruptcy does not mean an end to income and financial responsibility.

What this means is that receiving personal loan repayments is still possible, especially when the specific hardship which prompted bankruptcy proceedings has been overcome. And if this is the case, the lenders can still feel confident in granting loan approval.

The Truth of Your Situation

But how can someone that has been declared bankrupt not find themselves avoided by a lender, whether they are traditional lenders or online lenders? Knowing the truth of the bankruptcy situation is the key. Once this is understood, the route to a post bankruptcy personal loan is clearer.

The lending world has a vast variety of lenders in it, and there are some lending firms that specialize in post bankruptcy loans. In fact, given that such applicants have no existing debt to figure into the equation the chances of default are extremely low. For that reason, approval with poor credit histories is plausible.

Also, lenders are willing to accept that bankruptcy was likely the only way out of an impossible financial situation.

Recent years have seen the number seeking bankruptcy increase, so it no longer reflects terribly on a personal loan applicant.

The Significance of the Debt-To-Income Ratio

So, what is the fuss about not having existing debts anymore? That question might seem strange, but the explanation is pretty straightforward. Like any other loan, a post bankruptcy personal loan needs to fit within the debt-to-income ratio set by the lending industry.

The ratio states that a maximum 40% of available income can be used to repay debts. But since there is no existing debt, that means the repayment sum each month can be quite high. This automatically means that, even with a large loan, getting approval with poor credit histories is easier.

For example, if an applicant earns $4,000 per month, then the maximum to commit to repaying loans is $1,000. With no other debts, it means the repayment on the personal loan can be $1,000, thereby making a 3-year loan of around $30,000 affordable.

How To Qualify

It is worth noting that post bankruptcy personal loans are staggered according to the period of time that has elapsed since the ruling was made. So, it is extremely difficult to get a loan 3 months after being declared bankruptcy, but not so difficult after 2 years.

However, loans of perhaps no more than $3,000 are available for the first 12 months, and after that $5,000 up to $10,000 can be secured. Of course, getting approval with poor credit histories is never guaranteed, but collateral can make a huge difference.

However, it is advisable to take out small personal loans as soon as possible because repaying them allows the borrower to begin to rebuild their credit rating.

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Personal Debt Bankruptcy – Personal Debt Settlement Program

Do you really feel burden of your financial debt and credit card debt and in the response of these burdens or stress you are going to file Bankruptcy? If yes then stop because it is not a reliable, sensible and wise decision. It gives you a quick reduction in your debt amounts but on the other hand it financial paralyzed you such as you are not able to get any type of financial aid from your bank and other financial institutes such as you cannot borrow loan from bank for next several years. The process of Bankruptcy is much expensive due to lawyers and also a long term process due to several legal tests and other official formalities. It is also not safe because court have whole right to sell out your property and then give payback to you lenders. Bankruptcy is also not good for your lender because it is a bad impact on its credit report. Bankruptcy also effect economy of your country so federal administration introduces some alternates to Bankruptcy. Two of them and their terms are defined here which are best way to get rid of your credit debt.

One of the best is debt settlement in which you don’t contact your lender directly but you contact them with some middle person sometimes you contact your lender directly but we advice that you must contact your lender through some professional. So that you can get max from your input because they know many legal terms and they tell about your condition to the lender in financial terms and also they use the tool of Bankruptcy which is not beneficial for you and lender. Also the process of debt settlement is not need too much input and time so in lay man term all is well after debt settlement as compared to the Bankruptcy which makes you financial paralyze for several years.

Another way to get a safe way rather than Bankruptcy is Debt consolidation in which you get a chance to merge all your liabilities into a single liability. You will get a single consolidation loan from any bank or financial institute. This loan is for short time span and it gives you more time to pay back your money. The main advantage of debt consolidation process is that you get rid from many of your lenders and now you only contact a single man which is easy. With the help of this process you completely get rid of your debts for a time span of four to five years.

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