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Getting a Car Loan after Your Bankruptcy in Canada—What to Know

by | Jan 4, 2022

Financing a car after bankruptcy does not have to be stressful, especially when there are companies available to assist you. It is not true that declaring bankruptcy means you’re out of money and cannot rebuild your credit or get a car loan approved in the near future. 

The Government of Canada even reports that one in every six Canadians will declare personal bankruptcy or file a consumer proposal at one point. Therefore, the occurrence makes it far more common than you might think. You do not have to be embarrassed or concerned about how this will affect your future relationships with lenders or whether you will ever qualify for a car loan since numerous reputable lenders will approve you for a car loan. 

Declaring bankruptcy results in the discharge of the majority of your debts, which will remain on your credit record for up to six years. Despite this, obtaining a car loan at a reasonable interest rate is still possible.

Read this article to learn what you need about getting a vehicle loan after facing bankruptcy. 

Setting Your Hopes Up

It is critical to be realistic and aware that you cannot obtain the same loan terms as you would otherwise by declaring bankruptcy. Know the condition of your loan, particularly its interest rates, which will be higher than for someone with average credit. Your interest rate will also be higher because you are considered high risk following a bankruptcy.

While you are less likely to be approved for a high-end new car, you can find a wide range of excellent finance and lease options after going through bankruptcy. You must also remember that the car-buying process may take a little longer than usual because lenders will need some information from you or your trustee. We recommend working with the right company so that the process will be relatively straightforward.

Discovering the Appropriate Lender 

If you have recently filed for bankruptcy or a consumer proposal, you will not have to wait for years to get vehicle financing. Getting a car loan and sticking to your monthly payments can help you rebuild your credit. After all, you want to avoid further bad debts or poor payment history. 

To achieve this, you want to avoid wasting time hopping from one dealership to another only to be turned down, which is inconvenient and harmful for your credit. Therefore, look for lenders amenable to working with people experiencing bankruptcy. They must assist you by matching you with the ideal lender and assessing the most suitable options for you. 

Additionally, they should determine which partner you have for the best chance of loan approval after you have provided your location and financial situation information. 

Obtaining Your Credit Report and Score

Although obtaining your credit information may be difficult, it is vital to understand where you stand after bankruptcy. The lender will check your credit, so you must see what they’re looking at and make sure there aren’t any errors. 

There are various online sites where you can get a free credit report and score. Pay attention to the details in your credit report, which must include previous auto loans. Auto lenders’ credit-scoring models also heavily weigh the credit score, so positive on-time monthly loan payments will benefit you if you are reestablishing your credit.

Conclusion

Make sure to partner with the right loan experts to help you achieve a hassle-free vehicle loan after your bankruptcy. 

If you need reliable auto financing today, turn to Get Approved Canada. We are your Canadian loan specialists from coast to coast. Contact our team now for your next auto, personal, or mortgage loan!

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