Many people who have just acquitted from bankruptcy are worried that they will face problems with their lives because of inability to obtain a suitable loan. Bankruptcy record can stay on your credit report for up to 10 years but there are a lot of lenders that are eager to offer loans to people who have just acquitted from bankruptcy.
Lenders are willing to offer loans to people in post bankruptcy because they know that you will be grateful to get approved for any loan application without considering much amount its terms. Since you won’t be able to file for bankruptcy again for many years, the lenders have confidence that you are going to have enough money from your income to make repayment on the loan.
There are two types of bankruptcy in the USA including Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 bankruptcy is more serious as it will stay on your credit report for 10 years and it will deteriorate your credit score year after year. Chapter 13 bankruptcy means you have cleared your debt partially. Chapter 13 bankruptcy will stay on your credit report for 7 years.
You can try to send in your applications for unsecured personal loans to several financial institutions. You should first get a few copies of your credit report from one of the 3 credit bureaus. While looking at the credit report, you must check to see if the accounts you paid off in the chapter 13 bankruptcy are included on the report. If you are acquitted of a chapter 7 bankruptcy, you must check and see if all your accounts have a zero balance.
Apart from reviewing the credit report, the lender will also want to check your income. They will ask you for information on the income that you are receiving in the most recent months. Therefore, you should make sure to prepare the income proof before sending the loan application.
Usually, bad credit personal loans have high interest rates so you must make sure that you have the income to repay the loan if you plan to obtain one. The interest rate and fees are usually twice that of what is charged in an ordinary loan. When getting a bad credit personal loan, make sure you go through all the fees that you will be charged.
Sometimes, fees that sound as if they are charged annually are actually charged monthly so you should confirm it with your lender. You can save money by trying to apply for the bad credit personal loan from a credit union because they will offer lower rates than the bank. If you didn’t get approved for a personal loan, you can consider alternatives like secured card or peer to peer lending.