How to Get Personal Loans After Bankruptcy
Bankruptcy can turn your financial world upside down. Bankruptcy leaves an indelible mark of negativity on your credit file that can hard to escape. If you have filed bankruptcy this year, you certainly are not alone. There are over a quarter of a million bankruptcy petitions filed each quarter of the calendar year, on average, in the United States alone. There are many factors behind the rise in the number of bankruptcy proceedings – including the economic downturn and financial crisis that has left many American workers jobless.
Perhaps you are among those left looking for work without money for your bills – or maybe you have experienced a recent illness or injury that left you unable to work and therefore you became delinquent on important monthly payments – such as your mortgage or car payments. Filing bankruptcy becomes the only option for many individuals – and provides a means for them to protect their assets from foreclosure and repossession. If you have recently come out of bankruptcy – now is the time to begin rebuilding your future and improving your borrowing outlook.
Recovering Your Good Name
To begin the process of rebuilding your borrowing reputation and your good name, you should start with a personal loan. A personal loan can be either secured or unsecured, and there is a big difference between the two – mainly the amount of interest that you will pay on each. Because of your new status as a borrower who has filed bankruptcy – you should expect to pay more interest on either than the normal borrower would. Keep in mind, however, that paying a bit more interest now will help build your credit back up in order to qualify yourself for bigger loans with less interest later down the road – once you have established your newfound ability to manage your credit.
Two Versions Of The Personal Loan
A secured personal loan after bankruptcy is the easiest to obtain financial product that is available to borrowers of all incomes. A secured loan is a loan that is backed up by pledged collateral – typically your home or late model automobile. Your lender will place a lien against the property that you pledge for collateral that will be removed when you completely repay the lender. You can get secured loans from $1,000 up to $20,000 – depending upon your income and your ability to repay the lender for the money they extend to you. It is most generally accepted among financial advisors that individuals who have experienced recent bankruptcy start out at $5,000 or below for their first personal loans following bankruptcy discharge, but you may ask for more if you have a true need and are completely sure that you can repay the amount with ease.
An unsecured personal loan following bankruptcy is a bit harder to get. These types of loans are the riskiest in the eyes of the lender because they are not receiving collateral against the loan. It is most advisable to apply for the unsecured version of the personal loan with a creditworthy cosigner who will stand behind your ability to repay the lender.
Online Lenders Specialize In Post Bankruptcy Lending
You can find the loan products that are specifically tailored for your personal situation after bankruptcy on the Internet. There are many lenders who specialize in post bankruptcy personal loans that offer these loans online for borrowers at great rates that are highly competitive with traditional walk-in banks.