Can You Get a Car Loan After Bankruptcy in Ontario?
Financial trouble is one of the most stressful things a person can go through. Even if someone were to do everything right, a brief stint of bad luck could quickly eliminate economic security. Bankruptcy is a commonly used tool to help someone get out of crippling debt, but it comes with a fair number of strings attached. Just because someone is going through a tough financial stretch doesn’t mean they don’t need reliable and safe transportation. So, can you get a car loan after bankruptcy in Ontario? Yes, you can, but there is some crucial information you should know. Let’s take a look.
READ MORE: What Should You Ask When Buying a Used Car?
What Does Bankruptcy Mean?
There are various types of bankruptcy a person can consider. But, without getting too deep into the legal weeds, bankruptcy means financially starting over with no, or at least far less, debt to worry about. While filing for bankruptcy can discharge debt, doing so isn’t without consequences. A person’s credit profile is basically destroyed, which can mean years of difficulties in obtaining certain services.
We know this sounds bleak. However, there is good news. The shadow of bankruptcy doesn’t last forever, and there are things people can do to help themselves in the future — like financing a vehicle.
Can a Car Loan be Helpful After Bankruptcy?
As we said earlier, having a less-than-perfect credit score doesn’t automatically preclude someone from getting a loan to buy a vehicle. The finance team at Davey Auto Sales has a lot of experience and a large pool of resources available to help people find what they need financially.
The important thing to remember when looking for post-bankruptcy financing is that available options might be limited. New vehicles may be out of reach, but a comparable used model could be attainable. It’s also important to understand that applying for a car loan after filing for bankruptcy is likely to mean getting a subprime loan that will come with higher interest rates.
Again, there is some light at the end of the tunnel because making payments on time could put the borrower in a position to refinance their loan and cut down on some of the interest costs.
How Long Should You Wait to Get a Car Loan After Bankruptcy?
Everyone has a different financial story, and there is no one-size-fits-all solution for working through bankruptcy. Trying to find a car loan immediately after filing for bankruptcy isn’t an impossible task, but it could be difficult and costly. Financial experts suggest putting some time between completing the bankruptcy process and going out to look for financing, between nine and 12 months is approximately the industry consensus. During that time, keeping current on what bills and accounts remain will be very helpful when it comes to finding a car loan after filing for bankruptcy.
We know that dealing with financial challenges can be exhausting. Make an appointment with a Davey Auto Sales representative, today, if there is something we can do to make your journey as comfortable as possible.