After bankruptcy, two things hold you back from getting the personal loan you may need: Your credit score and the type of bankruptcy you filed for.
It is crucial to note that being bankrupt does not mean you cannot get a loan. If you just went through the bankruptcy process—and the court has discharged the bankruptcy—you may have limited options. Some lenders may immediately offer you loans with significantly higher interest rates, terms, and fees.
Don’ rush into taking on debt again. Think about how to take on debt slowly to rebuild your credit score.
Secured Credit Cards
One of the most significant advantages of a secured credit card is that you can obtain one with a poor credit score. With these cards, you begin by making a cash deposit. If, for example, you deposit $100, your line of credit will be $100.
Make small purchases and pay them off—each successful, on-time payment inches you closer to repairing your credit. Before applying for one, look for the card that reports your payments to all 3 credit bureaus.
This loan is precisely what the name implies. Even with a bad credit score, you can borrow a relatively small amount of money. But you don’t get to hold onto this money, at least not yet. The borrowed amount goes into an account. Then you make payments with interest.
When the borrowed amount is paid in full, you keep the money you originally borrowed. Think of it as the opposite of a traditional, unsecured loan. With these, you get the money, use it however you would like, and then pay it back with interest.
Like the secured credit card, there is little risk to the lender. The benefit to you is the ability to make on-time payments. If these get reported to the credit bureaus, you can work to improve your credit score.
There are other avenues for you to consider as well. Though it may not help you financially, you might be able to get a car loan. Lenders are going to look for ways to minimize their level of risk. A car loan might be able to achieve this because if you default on your payments, they can seize the car.
Some other options may be available if you are looking for ways to get money. Talk to your attorney or financial advisor to learn if they will work for you.
Hedtke Law Group
Financial challenges can happen to anyone. At Hedtke Law Group, we are passionate about finding solutions specific to your situation. When it comes to bankruptcy, we aim to help you file and do so correctly. By making the right decisions now with us, you are preparing yourself for a better tomorrow. Contact us today to schedule your free case evaluation.