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Ways To Get a Personal Loan After Bankruptcy


Bankruptcy Filing

Contrary to popular belief, you can get a personal loan after you have declared bankruptcy. However, it is going to be a whole lot more difficult. Here, we want to share with you a few tips and tricks that should make applying for a personal loan after bankruptcy a little bit easier.

Wait a Little Bit After Your Bankruptcy

While this may seem somewhat obvious to most, for many consumers it is not. While you will likely know that you need to wait for the bankruptcy process to be completed before you apply for a loan, you really shouldn’t be applying in the months following your case.

Your bankruptcy is going to be on your credit history. You will also have taken a massive hit to your credit score. Sadly, no lender in its right mind is going to be lending you money under these circumstances— read more from the Dollar.

Most people who apply for a personal loan after bankruptcy find that they need to wait at least a year before they can successfully apply for a loan. The longer you leave it, the more of an opportunity you have had to increase your credit score and put some of your bad financial history behind you, and this means you are more likely to be successful with the loan application process.

Remember: the bankruptcy is not going to be disappearing from your credit report any time soon. It will be either 7 or 10 years, dependent on the type of bankruptcy you were granted. So, unless you are applying for a personal loan after the expiry date of the loan, then you are just going to have to combat the bankruptcy in other ways.

Work on Improving Your Credit Score

Bankruptcy is going to be one of the biggest killers for your credit score. Expect it to fall by a good couple of hundred points. If you want the best chance of applying successfully for a personal loan, you will need to ensure that your credit score is in check before you apply.

If you are planning on applying for credit soon, then we suggest that you make yourself an account with one of the big credit reference agencies. You will then be able to keep tabs on your credit score and see how it improves over time.

The main focus for you is to ensure that you keep up to date with any payments that you are making. This is especially important if your bankruptcy involved setting up a payment plan with your creditors. If you are not able to meet the required payments on that payment plan, then you simply are not going to be able to apply for a personal loan any time soon. After all, if you cannot meet committed payments, how can they possibly approve you for more credit?

You will also need to ensure that you are not mindlessly applying for credit. You must remember that each time you apply for credit, a mark will be made on your credit report. The lenders will be able to see this. Not only will it be causing a dip in your credit score, but the creditors can see the amount you are applying and, of course, they will deny you for your loan. They know that if you are constantly applying for cash, there is a big chance that you are in a financial hole.

Honestly, improving your credit score shouldn’t be that difficult. Just make sure that you make timely repayments (and pay more than the minimum payment on your credit card), and you should be pretty much “good to go”. It will take a while to build up your score, but slowly but surely it will start to climb.

Look for Credit Builder Options

The secret for seeing an improvement in your credit is to gain credit…sort of. Many people who apply for loans after bankruptcy find that credit builder loans and secured credit cards are a good idea. However, make sure you do not borrow too much, and make sure you make your repayments on time or you could be dealing with bigger issues.

Secure Yourself a Stable Job

If you have regular employment, then you will find it a lot easier to get a loan. Lenders want people who are likely to be able to pay back the money they have borrowed. If you are hopping from job to job, or you have only been in your current job for a short time, then this indicates that you are a big risk. There may be a time where you are not in employment and this means that you are not a viable lending prospect.

If you don’t have a job, then there is no sense in applying for a personal loan after bankruptcy. It isn’t going to happen. Once you have managed to secure yourself a job, you will likely need to stay in the job for at least a year before you start to see a positive impact on your credit!

Remember; when you are applying for a loan — bankruptcy or not — the lender is going to need:

  • Proof of your employment. or
  • Proof of your income.

If you don’t have any of this, you aren’t getting approved.

They will ask you for details about your employer, and with a bankruptcy case, they may even ask for proof of employment form. Just be prepared to jump through some hoops.

Make a Budget

One of the most important things you can do before you apply for a loan is to make up a budget. This means making a list of all of your income and all of your outgoing expenses. This is to allow you to see how much you can afford to pay back on a loan each month.

You want to ensure that you will not be declaring bankruptcy again. So, only apply for loans that are within your means to apply for. Do not go crazy. The lenders will go to lengths to ensure that you do not borrow more than you can afford, but there is still only so much that they will be able to do.

Draft a Letter

If you are applying for a loan shortly after bankruptcy, you should try and draft a letter that details what happened in your life up until the point where you declared bankruptcy i.e. the reasons why you are bankrupt. While it is unlikely that the lender will ask to see this letter, it is good to have “just in case”. Some of the more credible lenders are known for asking for things like this on occasion.

Co-Signed Loan

While this is not preparing your finances as much, but if you want a big chance of being approved for a loan after you have declared bankruptcy, then a co-signed loan is the way to go. This is where you will ask somebody with a decent credit history to sign the loan. If you fail to pay the loan back, they will be responsible for it. This is going to be a last resort, but if you need money, there may be no other option.


We promise you that it is not impossible to apply for a personal loan after bankruptcy, it is just a lot more difficult. However, as long as you work on improving your finances, you will get there eventually. Just make sure that you take the time to shop around for a good deal on the loan. You do not want to be paying huge amounts of interest, and some lenders will try to take advantage of your credit history if you are not careful.