People who filed for bankruptcy receive negative impression from others. The first thing that comes to their mind is the person who filed for bankruptcy is completely penniless. They also think that people with bankruptcy record have money problems. It’s true that they did have financial problems, but it has been dealt with accordingly through bankruptcy. Moreover, not everyone who filed for bankruptcy are penniless. Some may still have assets that were not used for paying debts.
Individuals who have bankruptcy on their financial records must not worry. Even if they have such record, it’s still possible to get loans after bankruptcy to start their financial records again. The following are some tips in being able to file for a loan despite bankruptcy:
Study Your Current Financial Status
Get a hold of your current finances by checking out your records. There are possible discrepancies that may affect your record and your eligibility for a loan. You can get your credit report online. In case you’re unfamiliar with interpreting your credit record, you can ask assistance from an expert to interpret it for you. Ask about the probability of getting a loan with your credit record and ensure that you have been discharged from bankruptcy.
Look for Potential Creditors
The next thing to do is to look for creditors offering loans for people after bankruptcy. What many people don’t know is that there are many creditors that offer financial assistance, even for those who are unfortunate to the point of filing for bankruptcy. Search for creditors online or ask other friends who may have bankruptcy on their records, but successfully to get a loan.
Aside from creditors, asking friends and family for loan is also possible given that they have enough money to lend you. Remember that even if they are friend or family, pay your debt as they also need the money. Pay them no matter how much you can give them. You’re still in the process of establishing your credit record and even if the amount of money you owe them may not affect your credit standing, it’s only ethical to settle them as soon as you can.
Check Out Creditor Policies
It’s true that creditors can give you a loan despite bankruptcy, but it doesn’t mean that they don’t have any policy about this procedure. In fact, they can be unique per company that provides loan. First is ask creditors if they give out loan to people who had been in bankruptcy. Asking this question will cut down your time asking around. You can easily sort companies and keep you from providing all information when you won’t get a loan in the first place.
The next question to ask is the limit of loan they can provide to people post-bankruptcy. Some may offer a substantial amount while others may have limited offers. Settle with the company that has what you need and you should be fine.
Naturally, creditors may still check your credit standing before giving you a loan. They will assess the risk that comes with giving you a loan or whether you’ve been a good payer regardless of bankruptcy.
Once you found a company and completed all necessary procedures, you can wait and receive your loan amount. This is the same in applying for car loans and mortgages.
Be Ready for High Rates
As someone with financial problem in the past, be ready of high interests that come with your loan. This is why it’s essential to set a goal in borrowing loans. Loans for people after bankruptcy tend to have higher rates than those with good and bad credit records, which may result to further financial issues while you’re still in the process of getting back on your feet. Ask about the rates and be realistic in the amount you can pay.
Establish Credit Rating
Once you obtained your loan, you will need to establish your credit rating to experience the advantage received by people with good credit record. Remember that you need to prove that you’ve been changing your ways in dealing with your finances to build your credibility to creditors.
One of the first ways in building financial credibility is by paying your bills on time. Late bill payment is one of the main culprits in tarnishing your credit record. Let them see that you’re capable of paying your bills on time.
The next tip is diversifying your credits or loans. Take note that you will be financially stripped for some time. You may want to hold back in using your credit cards and use debit cards instead until you’ve fixed your finances.
Change Your Lifestyle
Finally, a little lifestyle tweak will help you pay your loans without problems. Your finances will be tight and the last thing you want to do is to accumulate more expenses under your name. If you’ve been shopping on impulse before, take time to be mindful of your expenses. Avoid overspending and keep in mind not to spend more than your current salary. Budget your monthly expenses to ensure it will be helpful in keeping you from further financial problems.
Do Your Best to Save
You may be in current financial issues, but it doesn’t mean that you should stop saving. Your savings can be helpful in building your credit standing. Financial institutions will see that you have some money on your account and can be useful in the future once you applied for loan. Take a little from your monthly salaries then save it in your account. Avoid using this money unless in emergency to ensure you have a fall back money.
Overall, getting loans for people after bankruptcy is possible, but it will need a lot of savings and lifestyle change. Continue doing these practices until you’ve fully established your current credit standing and get better loan deals in the future. Manage your finances properly with the help of an expert or on your own by taking advantage of apps or other tips online, especially coming from financial experts or other people who have successfully won over bankruptcy.