Bankruptcy, Bad Credit and a Personal Loan

If you have filed for bankruptcy or have bad credit and you require a personal loan then there are not many options for you. One option if your problem does not involve filing for bankruptcy is a personal loan from your bank, which may require you to get a co-signer.  If you have filed for bankruptcy then you will likely need to wait two years and maintain good credit over that time before being accepted for a personal loan from an established lending institution.

Let us say you have filed for bankruptcy about one year ago. Therefore, you will be considered to have bad credit when applying for a personal loan. Hence, that is likely not an option at this time. Acquiring a secured credit card could help to re-establish your credit.

Credit cards are the main source of personal bankruptcies. Personally, I feel that if people need to have a credit card then try to get by with just one and do not use it except only in emergencies. Consumers need to break the cycle of downward momentum brought on by credit card debt.  Talk to a debt counselor if you are having trouble getting yourself afloat.

Lenders are reluctant to lend to individuals who have filed for bankruptcy or have bad credit because it tells them that the person was willing to walk away from their debts in the past by filing for bankruptcy.

Bankruptcy and bad credit does not mean though that you cannot get a personal loan. Keep in mind that if you do secure a loan you could be paying higher interest rates due to your past credit history.  Should you take the loan if accepted? It is probably not a good idea because of the higher interest rates. It will just make it tougher on yourself; you could end up heading right back where you were.

The best option is to wait for the two-year period after your bankruptcy is discharge and then attempt to secure a personal loan if needed. Bankruptcy, bad credit and personal loans just do not go together!

In the United States, there are approximately 1.6 million personal bankruptcies a year and that number is climbing. A Bankruptcy can stay on your credit report for ten years and that is just not good for your credit rating.  Credit cards have been around since 1951 but really took off when the magnetic strip was added in the early 1970’s. Since then, numerous people have been unable to manage their personal credit and thus the rise in personal bankruptcies.

Therefore, if you have filed for bankruptcy or have bad credit, securing a personal loan can and will be very difficult.

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