Well after bankruptcy, a subprime lender is the best choice for financing .They offer loan to customers having a bad score of credit. The rate of interest can be brought down to competitive level if the credit is improved with time by acquiring assets or cash in hand. A person can easily get loan for himself from a subprime lender as the terms and conditions are very moderate.
The rates of interest may change after a period of time has elapsed in a deal. It usually ranges between 1 to 12% at the starting and then drops by two or three points after one year. This would only happen if the borrower has earned himself a good credit. Well after 24 months of bankruptcy a positive payments can hugely influence the earned good credit. Moreover the subprime loans can be without down payments i.e. there can be 100% financing. This makes the deal more flexible.
Prime institutions are those that provide loan to persons having a good credit score. The rates of interest provided by them are very low. It is a false belief that that a person with a bankruptcy cannot meet the conditions of the deal. The persons who had bankruptcy two years ago can still meet the requirements. The persons having a revolving account or a debt ratio of forty five can also qualify for the prime loan.
Prime loans are better than subprime loans on many respects such as the rate of interest provided is the lowest for prime loans whereas subprime rate of interest is usually 7% higher than what is normally on prime loans. One drawback is that the amount of borrow is limited. Never a 100% financing is provided by the prime money lender. Thus a customer needs to have a down payment when opting for a prime loan whereas the case is different for non prime lenders.