Saturday, December 15, 2012

Securing Personal Loans After Bankruptcy: Secrets That Make It Happen

For those of us who think that bankruptcy is the end of the line, the good news is that this is absolutely not true. There are loan opportunities, with lenders willing to take the risk and grant personal loans after bankruptcy to those applicants that are convincing enough to ease their concerns.

There is a certain stigma attached to bankruptcy, with lenders recognizing the fact that a borrower escaped having to repay their debts by declaring bankruptcy. As a result, their view of the borrower is negative. So how can any lender be willing to grant approval despite bankruptcy?

Every person has the right to recover from bankruptcy. It might take a long time, but gradually the reputation of the borrower can be improved. And while a large unsecured personal loan may be elusive for as long as 10 years, baby steps can lead to complete recovery eventually.

The Rating Regime

There is no doubting that bankruptcy makes things more difficult for bad credit borrowers, but this is only because of the image that lenders have of an applicant with a recent bankruptcy ruling against them. Getting personal loans after bankruptcy is a challenge but there are ways to improve that image.

The fact is that lenders look at other factors when considering a loan application, and as long as these areas look strong, then the chances of getting approval despite bankruptcy is greater than they might have seemed.

These other considerations include the income and employment status of the applicant, as well as the extent of their current debt. If these factors are in good order then the application for a personal loan can be viewed positively. However, lenders cannot help but be cautious, and are unlikely to approve any large loan for quite some time.

Method In Their Madness

Of course, with the degree of risk involved in lending to someone with a bankruptcy ruling against them, it seems foolish for any lender to grant loans to them. But there are reasons why they are willing to grant personal loans after bankruptcy.

First of all, statistics show that those who have been declared bankrupt are eager to regain a positive financial status. This means that the applicant is highly motivated in meeting the repayment schedule, so granting approval despite bankruptcy is not such a major gamble.

Also, laws state that those who have been declared bankrupt cannot seek bankruptcy again for at least 6 years after the ruling. This means that the borrower is unable to escape any debts for a set period of time. The investment, in the form of the personal loan, is therefore protected to an extent.

Securing Approval After Bankruptcy

Improving your chances of getting approval on a personal loan after bankruptcy comes down to a few simple steps. Getting a secured credit card provides an opportunity to begin to rebuild a credit reputation. These cards offer limited credit, but just enough to provide a positive impression in the updated credit report.

Providing a cosigner as part of the application is a huge boost to the chances of getting approval despite bankruptcy. This is because the cosigner guarantees the monthly repayments will be made. As a consequence, the interest rate falls too, making the loan all the more affordable.

Searching for online lenders is likely to end happily, with online lenders recognized experts in bad credit lending. This means the terms of the personal loan are more suitable and the chances of approval are greater.

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