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If your car repair costs are more than you can afford to pay out of pocket but less than the cost of a replacement vehicle, auto repair loans are an option. Compare rates at Credible to find the best lender for you, without impacting your credit scores.
Some auto shops partner with lenders to offer in-house financing options for customers. These can be convenient, but remember that interest rates and fees are often higher than personal loan offerings.
1. Online Lenders
There are several lenders that offer personal loans you can use for car repairs. These auto repair loans may be secured or unsecured, depending on the lender and their lending criteria. A unsecured car repair loan doesn’t require you to put up your vehicle as collateral and thus won’t affect your credit score. Often, these lenders also provide a fixed loan payment and the option to repay the funds over time.
PenFed Credit Union is one of the few lenders that offer a specialized personal loan that you can use for car repair expenses. This lender is known for offering low maximum rates, fewer fees and a simple application process. However, you’ll need to be a member of the credit union to be approved for this type of financing.
Upgrade is another popular lender that offers a fully digital application and funding in as little as one business day. It’s also worth considering the unique perks that this lender provides, such as the ability to set budgeting goals and track your spending in their app.
Other online lenders that provide a streamlined lending experience include LendingPoint, which is known for its commitment to helping borrowers improve their financial standing. It also boasts a simple application process and lenient credit score requirements, accepting scores as low as 580.
2. Traditional Lenders
There are a number of traditional lenders that offer auto repair loans. These loans typically come in the form of personal or car title loans and are secured by the vehicle’s blue book value. These loans may require a credit check or can be unsecured, depending on the lender. In some cases, these lenders have lenient credit requirements and can offer an auto repair loan for borrowers with bruised credit scores.
These lenders often offer competitive rates, and they have a range of terms that allow you to find a monthly payment that fits your budget. They also offer fast approval and funding, which can help you get your car back on the road sooner.
Other options for financing auto repairs include using an unsecured loans people under debt review personal loan or tapping into your emergency fund. In some cases, you can also use your credit card, though this could result in high interest rates and you may need to borrow enough to cover the expense in one payment.
Several lenders provide personal loans for car repair, including Upstart and SoFi. These lenders are worth considering if you have bad credit and need to cover unexpected expenses quickly. They typically have more lenient credit requirements than many other traditional lenders, and they may consider non-credit factors like education and employment when reviewing applications.
3. Third-Party Lenders
Owning a car comes with a lot of expenses, including repairs. If your car is in need of a major repair and you don’t have the cash on hand, an auto repair loan may be a good option for you.
There are many options for borrowers with bad credit to get an auto repair loan, but you should always compare offers before making a decision. You can find lenders online, at traditional banks and credit unions, or even at your local auto shop.
Some lenders specialize in auto repair loans, but others offer personal loans that can be used for any purpose, including car repairs. These loans can be either secured or unsecured, and the amount you borrow will depend on your credit score and the lender’s underwriting criteria.
The best place to look for a personal auto repair loan is with a bank or credit union. Some lenders are able to approve applicants with less-than-perfect credit, while other lenders have more stringent requirements. PenFed Credit Union is an example of a lender that provides personal loans for borrowers with bad credit.
A third way to finance an auto repair is with a credit card. However, this option may not be worth it if the car repair costs are very high. Credit cards typically have a high interest rate, and you might end up paying more than the cost of the repair itself.
4. Credit Cards
No one wants to hear the words, “Your car needs to be repaired or replaced.” But these expenses are often unavoidable and sometimes quite costly. Fortunately, there are financing options that can help. These include personal loans (which are typically unsecured and don’t require collateral), auto repair payment plans, credit cards, and even auto repair insurance (though this may be redundant with existing auto insurance policies).
Credit cards are convenient because they let you pay for things that you need or want, including automobile repairs and maintenance. However, be sure to pay off your expenses before the 0% APR period ends or you’ll be hit with hefty interest fees.
Mechanics and auto repair shops may also offer in-house financing options, which can be helpful if you don’t qualify for a traditional personal loan or credit card. This financing can take the form of a payment plan or a branded auto repair credit card, and it can usually be used for any car-related expense.
Personal loans are a good option for car repair because they provide flexible terms and fixed loan payments that can make it easier to budget for these costs. Additionally, personal loans are backed by banks or credit unions, and they can be more easily approved than payday and auto repair loans. However, it is important to compare personal loan rates and terms before applying for a loan.