In today’s world of skyrocketing debt, the average Canadian owes over $22,000. However, bankruptcy can be a bit of a mystery regarding personal finance in Canada. Once your bankruptcy is officially over, it sticks around on your credit record for at least six years (if it’s the first time you’ve been through it). The encouraging news is that you can secure a bad credit car loan shortly after bankruptcy without waiting six years for it to be removed from your credit report.
Several car loan companies focus on financing options for people with bad credit looking to buy a car.
When you file for bankruptcy in Canada, you typically work with a trustee who helps manage the process. The trustee informs your creditors about your bankruptcy filing. In most cases, first-time bankrupts have nine months before they are discharged and relieved of their debts. If you have an auto loan, you may have the option to keep it outside of bankruptcy or discharge the debt.
While you may be less likely to be approved for an expensive new car, there are still viable options available for individuals who have gone through bankruptcy. However, it’s crucial to have realistic expectations. Understand that filing for bankruptcy will affect your loan terms compared to someone with a better credit history. Your interest rate will also be higher since you’re considered high-risk after bankruptcy.
Getting an auto loan after bankruptcy used to be challenging, and it can still be difficult with traditional banks in some cases. After bankruptcy, it’s essential to monitor your credit report, pay your bills on time, and maintain low credit card balances.
The last thing you want is to spend your valuable time hopping from one dealership to another, facing rejection, or visiting banks who turn you down. Such experiences not only lead to frustration but can also have a detrimental effect on your credit score.
At CarEvo, we offer a practical solution with our lowest car loan rates in Canada. Our approach empowers customers with poor or no credit history to realize their dream of owning a car, even when others have turned them down. Utilize our Canada car loan calculator to determine your affordability. Adjust the sliders to observe how changes in loan duration and the total loan amount impact your monthly payments.
