Bankruptcy is not the end of the world. Financing can be obtained with bad credit, no credit, default or bankruptcy from specialized lenders. There are certain loans provided by lenders who deal specially with applicants that feature a bad credit score and history which can be easily qualified for regardless of past credit problems.

Bankruptcy is undoubtedly the most serious blemish on a credit report. A bankruptcy stays in your credit history for ten years after you obtain a discharge. Your credit will take a long time to recover from such situation and you need to work hard in order to achieve a good credit score again.

What To Expect

Anyone applying with bad credit should expect a high interest rate, given that you are applying for a loan with a past bankruptcy on your credit history you will most certainly get a high interest rate loan if you get approved. The interest rate is directly associated with the risk of the loan transaction and someone with bankruptcy on his credit report obviously implies a great risk.

Also, you should expect harsh requirements in terms of income and credit. Though it is true that if you have a bankruptcy in your credit report, your credit score can’t be high, yet, the lender will check your credit history to see which other delinquencies appear on your credit report. In order to get a loan after bankruptcy, your credit history from the time when your bankruptcy was discharged on should be almost impeccable.

As regards to income, a steady provable income is required for any loan but when it comes to bankruptcy loans, the severity rises. You should have an income high enough to cover for the monthly payments and any other expense that may come about. If under other circumstances a lender would consider approving your loan if your income was near the limit of the income needed for approval, with a bankruptcy on your credit report, that’s out of the question.

What Are The Good News Then?

The good news are that you can actually get approved for a loan after bankruptcy provided that you meet the requirements and those requirements can be met without too much efforts. Your credit score and history can be boosted, your income can be good enough provided you reduce your expenses, and the effect of a high interest rate can be moderated by requesting longer repayment programs.

If you have enough equity on your home, requesting a home equity loan is the best way to go. The fact that these loans carry collateral reduces the risk for the lender significantly and thus increases your chances of getting approved for a loan after you’ve gone through a bankruptcy process.

The timely payment of your bills, credit cards and small loans you can always request provided that they are only for small amounts, will contribute to increasing your credit score so you can qualify for loans of greater amounts. This may take some time but once you raise your credit it will be a lot easier to get finance and thus continue recovering from bad credit.


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