If you are applying for a personal loan after bankruptcy, it is important to know what steps a potential lender will take prior to any approval. Many people, mistakenly believe they will not qualify for any form of credit for a long time.
However it is possible to get a personal loan after bankruptcy. Here is an insight into what your lender is looking for:
1) Your current employment status is of the utmost importance. In addition, how long you have been with your current employer. If you have recently just started a new job, then forget about trying to get a loan. A lender would "like" to see you with your current employer for at least 2 years. But they can be flexible. A lender would definitely not consider anyone for a loan who had been in their current position for under 6 months.
2) Your credit score and report is the next thing a lender would look at. You know that if you have filed for bankruptcy, your credit score will not be very good. So be honest about this up front. There are usually 5 different types of response to your credit report, depending on which lender you approach:-
a) We do not accept anyone who has filed for bankruptcy
b) Accepted if you filed for bankruptcy over 2 years ago
c) Only if you filed over 5 years ago
d) We will accept you as long as you have at least 2 forms of unsecured credit
e) We will accept anyone and provide a loan to everyone
An important point - as you work your way down that list, the more you can expect to pay in APR, interest and possible fees.
3) Do you have any form of security to provide? Usually when applying for a personal loan, the outcome is decided by your credit record alone. As it is unsecured, you do not need to provide any security. However, when applying for a personal loan after bankruptcy, you are viewed as a higher risk. Speak to any family or friends who have a decent credit record and may be willing to co-sign on your loan. A lender will view this very favourably.
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