Getting an Auto Loan After Bankruptcy 7 With a Decent APR?

by James
(Lancaster, CA)

Question: I'm looking for an auto loan after Chapter 7 Bankruptcy with a decent APR. My BK was discharged three months ago and I want to buy a new car after one year has passed. I had several collections and charge offs prior to my filing.

I included two cars in my bankruptcy, but I paid one off and it shows on my credit report as paid as agreed with a 0 balance. I returned the other car to the lender. The other just shows as IIB on my credit report not as repossessed.

My credit scores are currently Vantage*Experian 667*623, Trans Union 569, Equifax 569.

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I have over 21+ years at the same job, 8 years at current address and a long credit history. I have fianced over 10 cars all paid off and the highest loan was $41000.

I have gotten two credit cards since my discharge both with a $1500 limit. One is a Capital One secure card the other is a Citi secured card.

I make $5400 a month and have a $1570 mortgage payment including escrow. I will have $12,000 for down payment for a new Toyota total cost of about $36000.

Do you think this will allow me to purchase the car I want with a 9/12% APR? If not will I need more down payment or should I wait longer than one year?


Answer: Hi James,

Getting an auto loan after your bankruptcy with a decent APR definitely sounds possible to me. You have a lot of positives that lenders will take into consideration.

Only downside will be that the bankruptcy will only be one year old, but with a solid job history, residence history, monthly income and large "cash" down payment I would think they would look past that.

Depending on what Toyota Finance is offering at the time, your score and overall credit after the BK you might be surprised to get an even better rate.

I would think that since you are looking to buy new that Toyota Finance is certainly going to be your best bet, but there may be other lenders that will still want your business and may even beat them with a better APR.

You are in one of the better situations for buying a car after bankruptcy that I've seen in awhile and this should be a fairly easy process for you.

Hope this helps,
Justin