Trying to Get a Loan After Bankruptcy?
After declaring bankruptcy, you may be tempted to swear off all loans and credit cards forever. However, nothing is better for your financial health than responsibly using lines of credit (with the emphasis on "responsibly").
But finding loans after declaring bankruptcy might feel like the proverbial search for a needle in a haystack. If this sounds familiar to you, not to worry: there are plenty of alternatives out there that are meant for post-bankruptcy petitioners.
Take a look at just a few of these options now:
Look For Secured Lines of Credit
While unsecured credit cards may be more difficult to get directly after declaring bankruptcy, there are credit cards out there meant specifically for individuals like you. These are known as "secured credit cards", and they can present you with the perfect opportunity to quickly build up your credit rating. Secured credit cards require a deposit (anywhere from $200 to $500), which will be used as collateral against your card use. This deposit will also be your card balance, so you'll never spend more than what you've originally put down on the card. You'll pay any balances off like a regular card, but if you're ever late, your deposit will be used to pay the card amount, and your credit limit will shrink.
Turn To Smaller Lenders For Help
Larger banks may be more hesitate to lend to you; however, you may find that local credit unions will be more forgiving of your bankruptcy, especially if you've been a loyal customer for several years. For the initial five years after declaring bankruptcy, bank with a credit union to enjoy these options.
Avoid "Bad Credit" Loans
You may think that "bad credit" loans and payday loans will provide you with the financial support you need, but avoid these lenders at all costs. These loans often come with sky-high interest rates, making it almost impossible to pay them off if you miss a payment. Additionally, some of these loans are so undercut with fees, interest rates and other costs that they may be considered illegal. If you need a loan, turn to a credit union or ask a family member to front the deposit for a secured loan instead of these loan sharks.
Finding loans after declaring bankruptcy isn't impossible; in fact, with these options at your fingertips, you'll be well on your way towards getting the money you need, in addition to a higher credit rating.