Can You Get a Home Equity Loan After Bankruptcy?
After filing for bankruptcy, your personal credit record takes a serious knock that can have consequences for many years to come. Applying for a loan such as a home equity loan may seem impossible, but that is not the case at all. If you have been discharged from bankruptcy more than 12 months previously then the chances of securing financing from a sub prime loans company a quite high. This is provided that you have kept to your repayments schedule over the past year and have payed all repayments on time and not missed any either.
Two years after bankruptcy, your chances of securing a home equity loan are even higher, and as an added bonus your sub prime interest rate will not be as high. If you still have difficulty borrowing it may be worthwhile to obtain a personal credit report in order to ascertain whether there are any irregularities that may be the result of a lender not adding the correct facts regarding your payment. Bear in mind that a bankruptcy will stay on your record for 7 to 10 years, so if you are able to do without a loan for the time being, when you o apply for a loan in the future you can expect a lower interest rate. The main thing to do is keep up to date with all payments in order to not blemish your credit report further.
Bankruptcy does still pose some stigma, mainly to financial institutions, but many people who have gone bankrupt go on to be successful in their lives and borrow again without any problems. If you do need to arrange a home equity loan but have become bankrupt prudence is the key. The best thing about a loan of this type is that it is secured on collateral and so banks are more likely to offer you a loan. The good thing about that is it will work in the favor of your credit report so you will be able to receive credit cards or car loans at better rates provided you do not default on any repayments. You are more likely to secure a home equity loan if you have managed to build up savings, as lenders look favorably on this, but this can be difficult, and having savings might mean you are not in need of the equity loan in the first place.
Also, be sure to check out several potential lenders regarding rates they are offering, but only allow lenders you wish to deal with to check out your credit record, as too many credit checks can have a negative effect on your credit rating.
