Getting a car loan after bankruptcy

Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

Dear Driving for Dollars,
My Chapter 13 bankruptcy will be discharged soon. How long before I can apply for a new car loan?
— Russ

Dear Russ,
Anyone who has filed for credit report. Those accounts stay there for seven years in a Chapter 13 bankruptcy and for 10 years in a Chapter 7 bankruptcy. So in your case, potential lenders will see your bankruptcy history for seven years after your filing. While there’s no set point drop in your credit score after a bankruptcy, it does carry less weight as time passes, so you’ll have an easier time getting a car loan in your last year than you will in your first.

In order to get a loan, the lenders want proof that you can pay it off so they look for a steady source of income and that you aren’t delinquent on other debt. You may be able to start re-establishing your credit with a smaller loan first. For a car loan specifically, consider saving your money so you can make a larger down payment on the car and thereby financing a smaller amount to make yourself less of a risk to a lender.

Ask the adviser

If you have a car question, e-mail it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories.

Bankrate’s content, including the guidance of its advice-and-expert columns and this Web site, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this Web site is governed by Bankrate’s Terms of Use.