How to Choose a High Risk Personal Loan Lender After Bankruptcy

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How to Choose a High Risk Personal Loan Lender After Bankruptcy. Lenders hesitate to make a personal loan after bankruptcy since history is a good predictor of future behavior. Keep in mind that lending and underwriting requirements vary from company to company. Some banks and finance companies refuse to lend to former bankrupt customers, while others will welcome the chance to help you reestablish your credit. Prepare to pay higher interest rates to earn your credit.

Contact companies who are already acquainted with you. Banks and lenders you reaffirm with during the bankruptcy may help you reestablish credit.

Ask for friends and family to refer you to lenders.

Be wary of Internet scams. Never pay to apply for loans and be cautious about giving out personal information such as bank account information.

Call lenders and ask questions about their lending requirements after a bankruptcy. Many companies require titled security or a qualified co-signer.

Make sure the lender you're working with reports payment history to the credit bureaus. Some banks and lenders may not report at all or may only report negative history.

Decide on a lender and have your credit pulled as few times as possible. Multiple credit pulls can be a deterrent to lenders and further lower your credit score.

Read contracts carefully. Find out if a pre-payment penalty applies on the loan, and make sure the interest rate and payments are as agreed.

Tips & Warnings

  • Begin the process of rebuilding credit as soon as possible after the bankruptcy discharge. Start small, requesting $500 to $1000. Proving yourself responsible with small amounts will begin to rebuild your credit.
  • Pay your payments on time. Negative credit after the bankruptcy can be disastrous.

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