How can you apply for a Personal Loan if you’ve declared Bankruptcy in the Past?
Personal loans are much needed in life and we never know when we might need one. When a financial crisis hit the best option to come out of it is to get a personal loan. But what if you have declared bankruptcy? Doesn’t that hurt? Can you apply for a personal loan if you have declared bankruptcy in past?
Yes, you can apply for a personal loan even after Bankruptcy in past. You can still be approved for personal loans. However, the process isn’t easy. So you need to understand the process you need to follow to apply for personal loans after Bankruptcy in past.
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Remember, when life trips you upside down with a financial crisis, you still do have a chance for loan approval. Chin up and scroll down to know about the process.
Can you avoid Scars of Bankruptcy?
People who have declared bankruptcy are at an extreme financial crisis. Bankruptcy occurs when a person misses paying mortgage and credit payments to the point where they cannot function under creditor demands.
Bankruptcy can be tough and the scars of bankruptcy are tougher. Your credit can be impacted for at least 7 to 10 years, making it hard to get loans. But don’t worry, although you have a bankruptcy in past, you can still get a personal loan. You cannot avoid the scars of bankruptcy but you can still sustain it. However, you might have to pay higher interest rates. But yes, it’s still possible to get a personal loan if you have declared bankruptcy in past.
Are loans available Post-Bankruptcy? What types of loans you can apply?
It is quite common that people need personal loans and people who have declared bankruptcy are no exemption in that. Although you can apply a personal loan after you finish bankruptcy proceedings, there are 2 types of bankruptcy that may potentially impact your ability to borrow a personal loan if you have declared bankruptcy in the past.
Chapter 7 is sometimes referred to as a fresh start. Usually, a chapter 7 bankruptcy will remain on a credit report for up to 10 years. In this, your debts are wiped out, although the court may liquidate some of your assets to meet a part of your debts.
Chapter 13: In this, instead of wiping out debts, you will be put on a court-ordered repayment plan. This repayment plan lasts between 3 to 5 years. This bankruptcy will drop off your credit report in 7 years.
How to improve your chance to get a personal loan after Bankruptcy?
· Proper Documentation:
After you finish your bankruptcy it is important to spend time to and make proper documentation. You should make clear documentation and include information on all your income sources. This may convince the lender that you can repay the loan on time.
· Prepare to explain
Nothing works better than explaining what led to your past bankruptcy. You can prepare an explaining bankruptcy and how you have repaired it.