Can I get a bankruptcy car loan?

UK car loans for people with bankruptcy are more readily available than you may think. As soon as your bankruptcy is over, you may be able to obtain one. A car loan is a secured loan and is therefore less risky to the lender than a loan with no security. Obviously if your stop your repayments, then you risk losing the car.

Bankruptcy car loan interest rate

There is no doubt about it, a bankruptcy car loan will carry a higher interest rate than a standard high street loan. As a discharged bankrupt, the lender will class you as a higher risk.

For this reason, the lender may also require a higher deposit and there may be higher than normal redemption fees.

Getting a good deal

As with any loan, you have the option to shop around for the best deal. There are a number of bankruptcy car loan lenders and all offer different terms. It's important to pay attention to the terms and conditions. Make sure that you know what you are signing up to.

You should check your credit report before applying. Make sure that it shows you have been discharged from bankruptcy. You may also wish to add a note explaining the reasons for your bankruptcy. This may improve your chances of getting a lower interest rate.

Having a deposit will reduce the risk you pose to the lender. With a higher deposit, you may be able to obtain lower rates.