Bankruptcy Articles Auto Loans After Bankruptcy - Do You Need a Co-signer or Collateral? Tip! Once you narrow down the list of attorneys you are considering, the next phase in considering bankruptcy is to obtain references in regard to each of these attorneys' prior performance. References will provide you with specific information on how a particular lawyer handles his or her business and on how successful he or she has been in the pursuit of prior bankruptcy cases. An auto loan after bankruptcy doesn't mean you have to have a co-signer or collateral. By searching for the right lender, you can get into a vehicle at reasonable rates. However, a co-signer can help you qualify for better rates. Easy Car Loans After Bankruptcy Right after a bankruptcy, rates will be high for any type of credit, including car loans. However, by waiting for two to three years, your score can be in good standing again. But most people need transportation, so you do have options before your credit is in good standing. One option is to get an auto loan through a dealership. This is a bad idea. Many scams can be found this way with high rates or bad cars. A better option is to look online for reasonable rates on auto loans. You can get pre-approved and shop for a car either at a dealership or through a private seller. Rates will be slightly higher at first, but you can improve them by increasing your down payment. You can also refinance your loan when your credit improves. Get a Better Car Loan Interest Rate with a Co-signer A co-signer with a great credit score can help you qualify for much better rates. Your auto loan rates are determined by the co-signer's financial history since they are also responsible for the loan. Tip! The debtor must get counseling and certification from a non-profit credit-counseling agency before the forms can be filed for your bankruptcy. If you do decide to apply with a co-signer, make sure you both understand the consequences. You can also apply for a guarantee loan, which places less requirements on the co-signer. Affect of Having a Collateral Loan Collateral affects your overall credit score when it comes to car loans. So by having significant assets, you may qualify for good rates even with a recent bankruptcy. A good idea would be to check your credit score to see were you stand. Your car is also considered collateral as part of any auto loan. That is why rates are lower for this type of loan. In the event that you can't make payment and the lender forecloses, your car would be sold. If there is a difference between the auctioned amount and the loan amount, you have to pay the difference. Here are our Recommended Bad Credit Auto Finance Companies Online. Tip! When considering your file for bankruptcy, it is important to weigh the sides between chapter 7 and chapter 13. Which one will do you more harm than good when it comes to solving your financial problems? Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.