The Loan Amount Issue On Bankruptcy Loans
Obtaining finance after a bankruptcy process is rather complicated but if you know
the credit and income requirements youll need to meet and what kind of loan and amount to require, youll increase your chances of getting approved. The amount issue is particularly important because the risk implied in the transaction grows exponentially as the amount increases and thus, chances of getting approved decrease.
Requesting a high amount loan will not contribute to getting approved. Instead, if you do your homework, maintain a good credit history for at least six months and apply for a moderate amount loan youll definitely increase your chances of getting approved for a loan after bankruptcy. However, there are many things you need to take into account in order to do so.
Loan Amount Limits
There is no particular loan limit that youll need to respect. Truth is that each loan type differs and your financial and credit circumstances will also determine the amount limit that youll be able to apply for without risking a decline. There are however some guidelines that mere logic dictates and you should consider.
Secured loans will let you apply for higher amounts without risking a decline because the limit is fixed by the value of the property. However, for unsecured loans youll only be able to request small amount loans never higher than a couple of thousands. You need to understand that the risk involved in lending to someone that has gone through a bankruptcy is too high for a lender to take a higher risk by lending more money.
Keeping A Good Credit History
The bankruptcy stain on your credit report is impossible to erase, it will follow you for at least ten years. Yet, lenders know that things can change and thus focus mainly on the last six months of your credit history. Thus, you need to make sure that the period after your bankruptcy is discharged shows absolutely no stains. The last six months of your credit report should be impeccable. You need to avoid late payments and missed payments in order to convince lenders that your credit and financial behavior has improved.
This of course, takes a lot of patience since recent credit history implies six months of timely payments of your bills and debts. However, that is the behavior that is expected of you by lenders and financial institutions and youd do well to try hard and make it customary to pay always on time and not only the minimum payments but the whole balances if possible.
If you really cant wait that much, there is another option that you can consider but need to be well thought. A co-signers credit report can offer the lender what yours cant. However, the co-signer will also be obliged to repay the loan and will have to take your place if you fail to meet the monthly payments. Thus, the co-signer is risking his assets just like the main applicant if the lender decides to take legal action in the event of default and should consider carefully being obliged by the loan contract as he will also be the debtor.
by: Melissa Kellett
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