Getting a car loan after a divorce with bad credit

You’ve been through the emotional roller coaster of divorce, but to make matters worse, your credit may have been in it as well. You might be done with the car you shared, or you might still be a co-borrower on a loan. Although divorce can be very stressful, getting a car loan with bad credit doesn’t have to be. There are options for those who find themselves in unique credit situations.

Subprime credit and divorce

After a divorce, your credit and income may take a hit. If you and your spouse have both worked, which is becoming the norm, you still have to completely recalculate your budget.

For those with bad credit resulting from situations such as divorce, job loss, or medical issues, there are dealerships that work with special lenders that focus on lending to borrowers with subprime credit – generally referred to as a credit score below 640.

If this is your first time in this credit zone, the process of buying a car may be different from what you are used to. But fear not, we’re here to help you get ready!

Budgeting and preparing for an auto loan

To prepare for a subprime auto loan after divorce, here are some general tips and guidelines:

  1. Budget: Having a monthly budget can really help you understand where you are at and keep track of your spending. It can also help you save for the down payment you need on a subprime car loan. It’s easy to keep track of your spending because there are plenty of apps that you can download right to your phone. As an added bonus, there are some budget and banking apps that can provide you with your credit score.
  2. Plan a deposit: Once you’ve got a budget, save for a big down payment. Expect lenders to charge at least $ 1,000 or 10% of the vehicle’s selling price, whichever is less. The more you save, the more you increase your chances of getting approved.
  3. Get your credit report: You can request your free credit reports every 12 months from the three major reporting bureaus: Experian, Equifax, and TransUnion. Check for possible errors and correct any outstanding negative accounts you may have.
  4. Communicate with your ex: If you and your ex are co-borrowers or co-applicants on a previous car loan, you or your ex must refinance or fully repay the car to get out of the arrangement. For more information on co-borrowers, click here.
  5. Gather your documents: Subprime lenders typically want proof of employment, proof of residency, proof of a working phone, a list of personal references, and a down payment. They also typically require an income of at least $ 1,500 to $ 2,000 per month before taxes, and a stable job with six months to a year at your current job with a three-year work history to show. These are the usual requirements, but they vary, so be sure to tidy up your papers so you don’t get confused or confused.

Make progress towards repairing your credit with an auto loan

Once you have a budget, a large down payment, and your paperwork and details in order, you can start repairing your credit with a post-divorce auto loan. TO Auto Express Credit, we have a nationwide network of dealers who work with special credit circumstances.

We have created a free, no-obligation service car loan application form that you can fill in the comfort of your own home. Once complete, we’ll get to work connecting you with a dealer in your area. Start repairing your credit and get back on the road.

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