After going through bankruptcy, there are bound to struggle if you need any type of financial assistance for some time. This is often due to lenders seeing you as a higher risk of default since you could file once again and not repay your loan. They tend to be hesitant when it comes to extending credit when that is the case. The best thing you can do when facing this situation is to be proactive. Follow some of these tips and you can help yourself should you ever be in need of a loan after bankruptcy.
Know Your Credit
Step one before applying for any type of loan is to look over your credit report. You need to look over every part of the report to ensure everything on it is completely accurate. Anything the judge dismissed during your bankruptcy proceedings should be gone, and whatever is left over must be accurate. If you come across inaccuracies, go through the outlined steps each credit bureau has to get that information corrected or removed. You will need to contact them individually, and follow the steps they provide you with.
Start a Budget and Stick to It!
Once you are done with your bankruptcy, you should establish a budget to help you set your finances up properly. You must make each payment on time in order to help re-establish your credit history. Setting up a household budget will allow you to see what type of income you have left to be able to repay any type of loan, should you need it. If you must turn to a lender, the more on time payments you can show since your bankruptcy, the better you will appear to the lender. Starting the moment you file bankruptcy shows that you are taking control over your finances, instead of letting them control you.
Always Be Honest
Telling a lender about your bankruptcy is always going to go over better than them looking through your credit and finding it themselves. Usually this will also allow you to give your side of the story before they automatically dismiss your application, giving you the opportunity to have your situation considered. The more honest you are when first speaking with a lender, the better your chances are at getting some type of funding from the lender.
Ask for Just What You Actually Need
This tip is typically the most difficult to follow, but one of the most important tips you can follow. If you are requesting a personal loan that will cover a brand new kitchen appliance, for example, ask for enough to cover the appliance and delivery, and nothing more. If you get more, you will typically blow it on other items you don’t need, leaving you more in debt than you started. Also, the lower the amount you are requesting, the more likely the lender is going to consider your request instead of automatically denying your application.
Prove Your Specific Financial Plan
Getting a personal loan after having gone through a bankruptcy is difficult at best, but showing up with a solid financial plan shows that you are making a conscious effort to steer clear of the pitfalls that caused your struggles in the past. You should do everything you can to prove you have your financial stability planned out on paper, and prove that it is something you have followed since filing. If you can show a financial plan with a savings allotment each month can be proved with something like bank statements showing regular withdrawals. This shows the lender the responsibility you are taking, and that you are seriously making efforts to avoid the same mistakes. This can be enough proof to some lenders that you are more stable of a risk than was previously thought, helping them to consider your request more heavily. This can help you align yourself with a lender that has options to help you, not only now, but also into the future.
Some individuals do not accept financial responsibility from their actions, but the majority of people who get to the point of bankruptcy understand just how detrimental financial changes must be. Prove this dedication to avoiding past mistakes, and the majority of lenders will show you a willingness to help if you hit a rough spot. Keep in mind, you are seeking help, so show the lender honesty and genuine answers, and you should be able to achieve your goal of a personal loan.