3 Tips For Getting A Personal Loan After Bankruptcy
While a difficult and complex decision, for many people with unmanageable debt, bankruptcy turns out to be the best option. While bankruptcy can alleviate a lot of your debt and financial stress, it can also do serious damage to your credit for a number of years. When a time comes in life when you need to take out a personal loan, you may find that the bankruptcy on your credit report limits your options. Luckily, there are things you can do to improve your odds of getting approved for a personal loan after bankruptcy.
Actively Work on Your Credit
The best thing you can do to after bankruptcy is work hard to improve your credit. Many people find that by making responsible payments and avoiding taking on too much debt, they can improve their credit score within a few years. The bankruptcy will still appear on your credit report, but the higher credit score will help to counteract that when loan officers make their decision. One great way to improve your credit is to apply for a small secured credit card, only charge a small purchase each month, and pay it off in full as soon as you get your bill.
Boost Your Income
A higher income can also improve your chances of being approved for a personal loan. This is because the higher your income, the more likely it is that you will be able to easily afford your personal loan payments. Asking for that long overdue raise, applying for a job at a different company that pays more, or supplementing your income with a part-time job or side hustle are all great ways to give your income a boost.
Consider a Co-Signer
In some cases, you may need a co-signer to get approved for a personal loan after bankruptcy, at least one with reasonable interest and terms. If you have a parent, significant other, or other person you're close to who you feel comfortable asking to co-sign, do so.
Be prepared to clearly and calmly argue your case, and even bring documentation to show that you have been financially responsible for some time and are dedicated to rebuilding your financial health. If you do end up with a co-signer, be careful to never take on more debt than you can easily pay, so that your co-signer is not negatively affected.
Getting approved for a personal loan after bankruptcy may not be easy, but following these tips will help improve your chances.