Bankruptcy Equity Home Loan

Trying to borrow after after bankruptcy is difficult neigh on impossible without equity in your home. There are many specialist lending companies who, in the form of sub prime loans will lend to bankrupt discharged borrows, but interest rates are not in the borrowers favor.  After bankruptcy, the main factors that help you when it comes to borrowing money is the length of time that has passed since the bankruptcy was discharged and the bankrupt’s behaviour since said discharge. A minimum of two years since discharge is required (though some lenders may lend with less), and at that stage interest rates will still be pretty high. A person who has maintained a good credit record for 5 years after bankruptcy is in the best position to gain a competitive home equity loan provided:

• They are currently in long term regular employment
• They haven’t defaulted on any repayments in since their bankruptcy discharge
• They have shown themselves as able to handle credit responsibly since, by making payments on time
• They have managed to get some forms of unsecured loans, that aren’t in default
• They have managed to save a sum of money

If any of this criteria is a problem don’t despair, as there are still banks and financial institutions that are willing to lend to you. To find such companies you should start with an online search, and use their loan calculators to estimate what they are likely to charge. You do not want every company you approach to pull up your credit record – a high number of searches of your credit rating also counts against you. A loan broker may also be an option as they have access to loan databases, but you need to beware of the fact that they get paid commission and so may not recommend the best loan for your situation, but push a loan that will pay them the most. Once you have a positive offer continue searching as you may secure an even better loan, aim for 4 to 5 loan offers as you can compare interest rates and costings. Having a number of offers puts you in the position of negotiating a little, this can save you money too.

Bankruptcy stays on record for 7 to 10 years, but while this is a relatively long time,  managing  your credit carefully means you can still secure competitive home equity loans while the bankruptcy is still on your record.