Bankruptcy is not the ideal way to lift the weight of debt off our shoulders, but increasingly it has become the only solution available to honest borrowers in the US. But this also means that bankruptcy does not have the stigma it once did. In fact, it is possible to get personal loans after bankruptcy without much trouble.
The reason is that the lending terrain has changed dramatically in recent years. The economic collapse in 2008 has created a great many bad credit borrowers, but many of these are victims of circumstance rather than unreliable borrowers. The result is that there are lenders willing to grant approval despite bankruptcy.
But is this just a huge mistake? Are borrowers asking for trouble by getting back into debt by applying for another personal loan? And what about the 10 years a bankruptcy ruling typically stays on a credit report?
How Approval Can Be Possible
It would be a lie to claim that bankruptcy no longer matters. There are serious consequences to the measure, and it remains true that lenders hesitate when assessing their applications for personal loans after bankruptcy. That is the challenge that applicants face.loansofamerica
But there are now an increasing number of lenders willing to consider loan applications as long as the key issues of income and affordability are addressed. Basically, if the applicant has a good source of income, and can afford to meet the repayments, there is no reason to turn the application down. So, they grant approval despite bankruptcy.
What is more, with bankruptcy clearing the decks of debt, the debt-to-income ratio is extremely good, ensuring that there is little problem in having excess income enough to meet the required repayments on a personal loan.loansofamerica
Faith Is Justified
However, this is not to say there is no risk involved in lending to those with a bankruptcy ruling against them. There is always the chance a borrower will default on a loan, and for this reason personal loans after bankruptcy come with higher interest rates.
Still, there is statistical evidence to suggest that those declared bankrupt want to regain their credit reputation, and so are less likely to default. And given that they have no other loans to their name, granting approval despite bankruptcy cannot be considered as big a risk as it first seems.
There is also the fact that bankruptcy can only be attained every 6 years. This means that the borrower cannot take the easy way out until the term of the personal loan is complete. So, they will be entitled to receive repayments for the duration.loansofamerica
Making Sure of Approval
While there is no such thing as guaranteed loan approval, there are some ways to improve the chances of getting approval. Even when seeking a personal loan after bankruptcy, the requirements needed to secure a green light are pretty straightforward loansofamerica
For the most part, improving your credit score does a lot to help. A secured credit card is the perfect way to rebuild a credit reputation, and because of the security of a pre-paid balance, approval is easy. Another option is to use a cosigner to guarantee monthly repayments. Since getting their money back is the key consideration for lenders, this assurance all but seals approval despite bankruptcy.loansofamerica
Also, find lenders that have a background in granting personal loans, and other financial products, to people despite bankruptcy. These are most likely to approve an applicant, with loan deals designed for the job.loansofamerica