Car Repair Loans: Financing To Get You Back On the Road Quickly
You may need a car repair when you least expect it, and it may cost you hundreds or even thousands of dollars. If you don’t have the funds to pay for fixing your car upfront, don’t worry. There are plenty of car repair financing options that can help you cover the cost of new tires, brake work, an engine tune-up, and any other repair you may need.
Here's how car repair loans work and financing options to consider.
What is a car repair loan and how does it work?
A car repair loan is a type of loan you can use to cover the cost of car repairs. It can help you pay for a tire replacement, new brakes, engine repairs, car accident damage that’s not covered by insurance, and more.
If you don’t have the cash to fund a car repair upfront, a car repair loan may come in handy. In many cases, you can borrow money and pay back what you owe over time.
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Car repair loans with bad credit
Fortunately, you can still get an auto repair financing with bad credit. Many lenders have lenient requirements and are willing to lend to borrowers with less-than-perfect credit histories. They might consider other factors, like your income and employment situation, when deciding whether to approve you.
5 car repair loan options
There are a number of car repair financing options you may want to consider, including:
Personal loan
If you take out a personal loan, you’ll receive a lump sum of money that you can put toward your car repair. You can pay back the vehicle repair loan through fixed monthly payments over an agreed-upon term, which can be anywhere from a few months to several years.
Credit card
A credit card is a flexible auto car repair financing solution because you can borrow as much or as little money as you’d like up to your set credit limit. If you’re unsure of exactly how much your car repair will cost, a credit card may make sense. Some credit cards will even reward you with cash back or points.
Title loan
With a title loan, you give a lender the title to your car until you repay it in full. The value of your car will determine your loan amount. Fortunately, you’ll be able to drive your vehicle while you pay back your auto repair loan.
Mechanic financing
Many mechanics offer car repair financing that can allow you to pay them back for their services over time. Some mechanics partner with lenders that provide personal loans and credit cards. They may even advertise 0% introductory APR but will charge you high-interest fees once the introductory period is over.
Emergency fund
An emergency fund is money that you can set aside to cover unexpected expenses like car repairs. This extra cash can help you avoid emergency car repair loans and save money on interest and fees.
You may store your emergency fund in a high-interest savings account or anywhere else you can access them easily. If possible, keep three to six months’ worth of monthly expenses in your emergency fund at all times.
How to apply for a car repair loan
To apply for a car repair loan, follow these steps:
- Shop around: Not all car repair loans are created equal. Do your research and find a few options that meet your needs. Compare interest rates, terms, and fees.
- Choose a lender: Pick a lender offering an auto repair loan that meets your needs. Make sure to read reviews to make sure they’re reputable.
- Apply for a car repair loan: Fill out a formal loan application online or in-person. Be prepared to submit documents, like your government-issued ID, pay stubs, and tax forms.
- Get funded: Upon approval, the lender will distribute your funds, usually via direct deposit. Many lenders offer fast funding that same day, within 24 hours, or in a few business days.
Loans from Advance America
In need of a fast car repair loan? Advance America offers options you may want to consider.
Payday Loans. Payday loans are small-dollar, fast cash loans you can repay when you get your paycheck, typically within two to four weeks. These loans might be worth considering if you can’t wait long to pay for your car repair.
Installment Loans. With installment loans, you can receive a lump sum of money upfront and pay it back through fixed monthly payments, or installments. If you have to cover an expensive auto repair, an installment loan might make sense.
Title Loans. These are secured loans that require the borrower to use their car as collateral. After you get approved, you can receive cash based on your vehicle’s appraised value. As long as your car is still in working order, you can continue to drive it as you get it fixed and repay your loan.
Line of Credit. A line of credit is similar to a credit card, but usually comes with lower interest rates and larger amounts. You can withdraw money up to a set credit limit whenever you’d like, and will only pay interest on the amount you borrow. If you’re unsure of exactly how much your car repair will cost, a line of credit may be a useful option.
Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your financial circumstances.
