topic Re: Chapter 7 about to discharge -- will loan options get better after discharge? in Auto Loans

Chapter 7 about to discharge -- will loan options get better after discharge?

Anonymous — Fri, 29 Jan 2021 17:02:33 GMT

My Chapter 7 has not yet officially discharged, but I've put in a few "pre-qualify" applications already any my loan options are all bad according to those--like 26% interest. However, when I look on sites like CreditKarma or Credit Sesame, they're quoting me all kinds of rates around 9-12%. I expect that the discharge will be final within the next couple weeks.

Obviously, I'm not going to do any hard pulls until the bankruptcy finalizes.

Is it realistic to believe that I'll be offered those better rates around 9-12% once the debts are discharged and Chapter 7 case ends? Or is it probable that I should expect to have to pay 25%+?

Credit Score: 620 (Equifax), 616 (Transunion)

AAoA:

# of positive trade lines:

# of negative trade lines:

Income: $40,000/yr

Lenght of Employment: 4.5 yrs

Previous Loan Experience: Prior car loan let go in bankruptcy, but three years' worth of payments were current up until I filed

Debt-to-Income (DTI): 0%

Year of Car: 2017

Miles: 90k

Purchase/Refinance: purchase

Requested loan term (XX Months): 60

Down payment amount: $2900

Co-borrower/Co-Signer: NA

Other: I have one open credit card with a $500 limit. There is a balance of $5.99 on it currently. My plan is to charge next to nothing on it to keep the credit utilization number low.

Re: Chapter 7 about to discharge -- will loan options get better after discharge?

mmajer4211 — Fri, 29 Jan 2021 17:12:41 GMT

I'm not sure what rates for a loan you would qualify for so I won't comment on that but as a rule of thumb I would never base any of my credit decisions from something that stemmed from Credit Karma's recommendations. They do not provide accurate scores which in turn does not provide accurate rates.

There are companies out there that will give you an accurate rate that does not require a HP so I would probably recommend starting there.

Re: Chapter 7 about to discharge -- will loan options get better after discharge?

Loquat — Sat, 30 Jan 2021 09:33:13 GMT

I agree that no one can really tell you what rate you'll get. You'll just have to apply and see. I would suggest not going into an auto loan with an expectation of lower rates considering your BK would be fresh.

With that being said, I know a good down payment can help overcome a multitude of financial sins so anything is possible.

The bigger the down payment the more likely you are to get better terms that if you went in with little to nothing down.

Re: Chapter 7 about to discharge -- will loan options get better after discharge?

mich800 — Sat, 30 Jan 2021 15:17:44 GMT

I agree with all the above. And will add, make sure you are not jumping back into the fire financing a 100k mile used vehicle for 60 months.

Re: Chapter 7 about to discharge -- will loan options get better after discharge?

toi34 — Sat, 06 Feb 2021 21:41:26 GMT

@Anonymous wrote:
My Chapter 7 has not yet officially discharged, but I've put in a few "pre-qualify" applications already any my loan options are all bad according to those--like 26% interest. However, when I look on sites like CreditKarma or Credit Sesame, they're quoting me all kinds of rates around 9-12%. I expect that the discharge will be final within the next couple weeks.

Obviously, I'm not going to do any hard pulls until the bankruptcy finalizes.

Is it realistic to believe that I'll be offered those better rates around 9-12% once the debts are discharged and Chapter 7 case ends? Or is it probable that I should expect to have to pay 25%+?

Credit Score: 620 (Equifax), 616 (Transunion)
AAoA:
# of positive trade lines:
# of negative trade lines:
Income: $40,000/yr
Lenght of Employment: 4.5 yrs
Previous Loan Experience: Prior car loan let go in bankruptcy, but three years' worth of payments were current up until I filed
Debt-to-Income (DTI): 0%
Year of Car: 2017
Miles: 90k
Purchase/Refinance: purchase
Requested loan term (XX Months): 60
Down payment amount: $2900
Co-borrower/Co-Signer: NA
Other: I have one open credit card with a $500 limit. There is a balance of $5.99 on it currently. My plan is to charge next to nothing on it to keep the credit utilization number low.

If I were you I would work with a local credit union. I was less than 2 years post discharge and I was able to finance a 3 year old Mercedes C-Class still under manufacturers warranty with only $1500 down and an interest rate of 3.25%, deferred payments for 90 days, and GAP coverage. My monthly payments are $435/60mos.

Good luck.