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Personal Loans for Those After a Bankruptcy
If you need a loan after bankruptcy, then you might need to understand a little bit about personal loans for those with less than perfect credit. This article will tell you everything you need to know about personal loans after bankruptcy.
Sometimes it’s not easy to get a loan of any sort after bankruptcy, but this simply isn’t true. Many people think that the bankruptcy must be eliminated from their credit report before they can apply and get approved for a personal loan. However, this thinking is wrong and even those with a recent bankruptcy can become approved for a personal loan from a bank or another lending institution.
Personal Loan Guidelines After Bankruptcy
It’s important to be very careful with any personal loans you decide to take out after a bankruptcy. Especially if you want to improve your financial situation. With a bankruptcy, you will have to take specific steps to help improve your credit score and get rid of some of the accounts you have defaulted on. Start by looking for the right lender that can offer you a personal loan after bankruptcy. Very rarely, a lender will require you to clear the bankruptcy from your credit report before they approve you for the loan you need and want.
Personal Lenders for After Bankruptcy
Many lenders offer personal loans after bankruptcy, but you still need to make sure you find the right type of loan for you and apply for one you will be approved by. As long as you have improved your credit score in one way or another, after bankruptcy, you will be able to find a lender that will work with you.
They will, however, look at the income you have and make sure you can handle the payments on the loan you want to take out. Credit won’t be the only deciding factor and if your income can support the loan, most of these lenders will take into consideration how much you make and how long you have been working for your current company.
Improving your Credit Score
Before you decide you want to get a personal loan after bankruptcy, you want to make sure you have done everything you can to improve your credit score. Your bankruptcy might cause your credit score to drop by as much as 100 points. However, once the bankruptcy is discharged and some of the debts go away or change your credit score will start to recover.
You want to make sure your credit has recovered quite a bit before you try to get a personal loan of any nature. You may want to hire a company to help settle some of the debts you still have or to help get rid of debts that your bankruptcy handled. If you can get your credit to the point where e you don’t have any negative debts, then getting approved for a personal loan will be very easy. Also, take the time to ensure any errors are removed or fixed. You can do this by writing a letter to the creditor or making a phone call and asking to have them report the correct information. If that doesn’t work, you can simply dispute the debt with the credit agency.
Other Things to Consider
Once you fix your credit, you still need to consider a few things before applying for the right personal loan for you. If your credit score becomes very good, many financial institutions will allow you to get a loan through them. It will not be very hard to get your loan if you have a good credit score and a strong income. Some lenders will charge a higher interest rate due to your bankruptcy. This is due to how risky your loan is compared to another one. Most lenders, however, will overlook your credit history and will not care much about the bankruptcy. Make sure you understand all the policies of the lender before you take out the loan.
Your debt amount could also cause you an issue, but after bankruptcy, this should all be cleared up. This type of loan will help you whenever you want to get a loan after you have filed for bankruptcy. Personal loans after bankruptcy will help you do more with your finances and will allow you to take care of anything you need to deal with currently or in the future.
Loan Modification Procedures
When you are in a period of extreme financial difficulty, it may be best for you to look into a possible loan modification procedure.
While it is not initially easy to be approved for a loan modification procedure, it may be in your best interests to try to at least obtain some information from your bank. Many banks are more than willing to work with you and your financial needs, especially since they want to ensure that you will continue to make your scheduled monthly payments on your loan.
The first step in the loan modification procedure is approval. In order to be approved for a loan modification, you have to prove that you are currently experiencing a period of extreme financial difficulty. Possible reasons for financial difficulty may include:
Accidental Injury
Unexpected Medical Expenses
Unemployment, Company Lay-Off
Death of family member
General Financial hardship
No matter what the reason is for your financial situation, it is very important that you document your financial problems with paperwork. If necessary, bring copies of your payment receipts, medical receipts, written documentation of your financial situation, bank statements, etc. These documents will aid you greatly in proving to your bank that you are currently unable to make your scheduled monthly payments.
Once the bank has approved your request for a loan modification, there is a period where they may communicate with you on acceptable terms for the modification of your loan. It’s very important that you thoroughly examine any changes that your bank may make to your loan, as it is sometimes common for the negotiated payment amount to be higher than the initial amount.
This may be an attempt from the bank for you to pay off your balance sooner, since you are now regarded as “high-risk” because of your financial situation. It’s very important to let your bank know exactly what you can afford each month, as this will ensure that a beneficial decision is reached for both you and your bank.
In some cases, you may have an existing loan with a company that does not offer loan modification procedures. If this is the case, you may have to either prioritize your other finances around this loan payment, or let the company know that you are no longer able to make the payments. Since most companies prefer to receive their money without the aid of collection agencies, this may help them to negotiate a decision to work with you and your finances.