Guide To Personal Loans After Bankruptcy

Securing a personal loan after bankruptcy can be challenging but not impossible. So how do you increase your chances of qualifying?

We are here to help answer that.

Throughout this blog we will provide information about bankruptcies, personal loans, and getting a personal loan after going through bankruptcy.

Can I get a personal after filing for bankruptcy or during the process?

In most cases, it’s not possible to secure a personal loan during the bankruptcy process. However, once the process is completed you can secure a personal loan.

To increase your chance of pre-qualification you should wait a while after your bankruptcy to apply for a personal loan. It can be helpful to start with a secured loan to improve your credibility and show that you can make payments on time.

In addition, it’s likely that the interest rates and fees will be high. This could easily put you back on track for another bankruptcy.

Most lenders like to see at least one to two years of consecutive on-time payments following a closed bankruptcy.If you have this, your chance of pre-qualification can be increased, despite your bankruptcy.

What is your credit score after bankruptcy?

The higher your credit score, the more it can drop after filing a bankruptcy. This means that bankruptcy can be a better option for people with fair or poor credit scores.

Even though bankruptcy can have a positive long term effect on your credit and life, it can be tough in the beginning. According to reliable sources, credit scores 700 or above can drop 200+ points after filing for a bankruptcy.

Lower scores around 680 can drop 130-150+ points after filing for bankruptcy. Fair or poor credit scores (670 or below) can be less likely to see large point drops as a result of filing for bankruptcy.

When should I consider bankruptcy?

Bankruptcies are designed to assist people drowning in debt discover a fresh start and wipe their slate clean. However, before committing to filing a bankruptcy you should consider the positives and negatives. If you cannot repay your debts, you may want to consider going through the legal proceedings to file bankruptcy.

Depending on your situation, you can either file chapter 7 or chapter 13 bankruptcy. In order to be eligible for chapter 7 bankruptcy you must be able to prove that you truly do not have the means to repay your debt. If you qualify, most of your debts should be forgiven after the bankruptcy.

In order to be eligible for chapter 13 bankruptcy you need to prove that your disposable income is significant enough to repay debt using a reasonable repayment plan.

How fast can I raise my credit score after chapter 7?

While chapter 7 can provide relief and leave you debt-free it will remain on your credit report for at least 10 years. Over time its impact can fade, but in the first 10 years it’s important you do everything you can to restore your credit to the best of your ability.

Since lenders may be hesitant to lend you money you may need to get creative using secured loans or co-signed loans to start rebuilding your credit.

How many points does your credit score go up when a bankruptcy comes off?

Despite what you may think, your credit score can actually drop after your bankruptcy comes off. Post bankruptcy removal you can be grouped with others who have not filed for bankruptcy causing your credit score to go down.

The sooner and more you start rebuilding your credit after the bankruptcy, the less it should drop once the bankruptcy is removed. 

How bad is it to file bankruptcy twice?

Filing for bankruptcy twice should be evaluated on a case by case basis.

While you can file for bankruptcy two or three times you should consult a professional about your situation before making any decisions.

What is the downside of filing bankruptcy?

Even though bankruptcy can free you of most of your debt, it’s impact is not all positive. Some downsides of filing bankruptcy can include…

Downsides of filing for bankruptcy:

#1. The following debts are not eliminated:

  • Your most recent back taxes
  • Fines owed to government agencies
  • Most student loans
  • Child support and alimony

#2. Non-exempt property is not protected (this could include your home, stocks, cash, etc.)

#3. Bankruptcy stays on credit report for 10 years

#4. Filing for bankruptcy can be costly

How long after Chapter 7 Can I get a personal loan?

In some cases, you can secure a personal loan within a few months after completing the bankruptcy process. However, qualifying for a personal loan with a low interest rate after bankruptcy could be challenging.

Some lenders specialize in personal loans for people with credit challenges. This means that they may be more likely to pre-qualify you for a personal loan after bankruptcy.

Acorn Finance can help connect you to multiple lenders that can help you. Their secure platform allows you to submit one application that will not affect your credit. After submitting your application you can receive multiple personalized loan offers within seconds.

How many years after bankruptcy can you get a loan?

Bankruptcy stays on your credit for 10 years. This means that lenders will be able to see it on your credit report. Some lenders may charge higher interest rights because of the bankruptcy even if you filed years prior.

In most cases, you can have the best chance of approval for a loan 1-2 years after your bankruptcy when dealing with a bank, but you can pre-qualify sooner with some personal loan lenders. 

Best personal loan options for people who have gone through bankruptcy

Acorn Finance is one of the best places for people that have gone through bankruptcy to secure a personal loan.

Acorn Finance is a reliable and top-rated company that partners with a variety of lenders to offer personal loans for all credit types. 

Three steps to get started with Acorn Finance:

#1. Complete and submit a short loan application online

#2. Receive multiple pre-qualified offers

#3. Get connected with lenders to obtain your pre-qualified loan


In conclusion, it is possible to secure a personal loan after going through bankruptcy. It’s important to remember that interest rates might be higher making it important for you to make sure payments are manageable.

The only way to help build your credit again is to use it so you may have to accept the higher interest rates until your credit health is better. 

Looking to secure a personal loan after going through bankruptcy? Visit Acorn Finance today!

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