There are many lenders who are willing to you finance a car after a foreclosure. However, you need to be aware that those loans will have a shorter repayment period and a much higher APR than those offered to people without a foreclosure. We can typically help you get approved even with a foreclosure in your past, as we work with lenders and dealers across the nation who have experience assisting people with all kinds of credit issues. Go here to apply online.
Saving up…for Money Down
The first step to buying a car after the foreclosure is to start building a down payment. Since you will fall into the bad credit category, you will need a cash down payment that is between 20 and 50 percent of the total purchase price of the vehicle you want. The lower your credit score is, the higher your down payment will need to be.
Types of Vehicles to Consider
The down payment constrictor and your low credit score will also narrow the spectrum of vehicles that you will be approved for. You will need to look at base model, low priced vehicles. Some examples are the Kia Rio, Hyundai Accent, Ford Fiesta, and Chevy Spark. You may also need to consider used vehicles that are less than seven years old.
Restoring Your Credit
While building your down payment you can start rebuilding your creditworthiness. Start by paying all open accounts on time, including utility and credit accounts. Many people file for bankruptcy after a foreclosure. If you have done so and it has been settled, try to open a new credit card account, even if you have to open a secured account. A credit card is the easiest way to rebuild credit. The key is to keep your balance under thirty percent of your credit limit and make all of your payments on time.
Lastly, you will need to be prepared to shop your loan around. After a foreclosure, traditional lenders will not approve your car loan. We can help you find a lender who is willing to offer you a second chance with credit. Some may be willing to offer you credit while your foreclosure is in process and your bankruptcy is still open, if state laws allow of course. You can help speed the application process along by having a few documents on hand. Have a copy of the following documentation on hand: a recent pay stub, valid driver’s license, proof of insurance, recent federal tax return, and a current utility bill (paid in full).