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Car repairs never come at a convenient time and they are often expensive. It can be difficult to find the money to pay for these unexpected expenses.
Luckily, there are loan options that can provide the cash you need to cover the cost of your auto repair bill. These loans are typically personal installment loans that are unsecured, meaning no credit check is required.
1. Credit Cards
Many mechanics and auto repair shops partner with lenders to offer their own financing options, such as a branded credit card or car payment plan. These cards often feature promotions and discounts, along with short interest-free or deferred periods. Once the introductory period ends, however, you’ll likely face high interest rates.
If you have good credit, personal loans from banks and other lenders may provide a lower-cost alternative to credit cards. Look for a lender with an online application that makes it easy to compare loan terms and instant cash loan no credit check interest rates, and to calculate your monthly payments. For example, Upstart and Rocket Loans allow you to pre-qualify without impacting your credit score, while PenFed and First Tech Credit Union offer great choices for people with excellent credit.
People rely on cars to get them to work every day, so if yours breaks down and you can’t afford to pay for the necessary repairs, it can be a real financial disaster. In most cases, you’ll need to borrow money in order to pay for the repairs, and that can be risky. It’s best to keep an emergency fund stocked with enough cash to cover the expenses, and to limit your borrowing to necessities such as a replacement tire or new windshield. To avoid accumulating debt, you should also try to repay any borrowed funds as quickly as possible.
2. Personal Loans
The most popular financing option for unexpected car repair costs is a personal loan, which can provide up to $1,000 or more and has a fixed repayment term. Personal loans can be obtained from banks, credit unions, and online lenders, which offer competitive rates and terms. When comparing personal loan rates, be sure to consider all fees, which can include application fees, origination fees, and late fees.
Car loan approval and the annual percentage rate (APR) you qualify for will largely depend on your credit score. If you have good to excellent credit, you can typically find a personal loan with an APR below 5%, which may be significantly less than the interest charges on your auto repair bill. For those with lower credit, you may be able to find a personal loan that has a 0% APR intro period or other flexible terms.
You can use the tools on this website to compare car repair loan options and decide which one is right for you. Aside from loan rates, other factors to consider include the loan minimums and maximums and whether it’s secured or unsecured. For example, some lenders require a car as collateral and will repossess it if you fail to repay the loan. You can also check if you qualify for an unsecured personal loan with a cosigner, which can improve your odds of approval and may help lower the APR.
3. Auto Repair Shops
Many mechanics and auto repair shops work with lenders to offer car repair payment plans directly to their customers. These can come in the form of a branded credit card or a personal loan. These cards often come with promotions and discounts for repairs, as well as a period of little or no interest. However, you should always check your warranty status and insurance policy to make sure that the repairs are covered before applying for this type of financing.
You can also compare prices between repair shops to find the best deal. Some shops may even be able to provide you with a free estimate. When you are comparing pricing, look at each shop’s invoice and make sure that it includes each repair made, each part replaced, the cost for the parts, and the labor involved. It should also indicate whether the replacement parts are used, refurbished, or new and the odometer reading at the time the car left the shop.
If your car repairs are very expensive, you may want to consider other options. Some nonprofits and community organizations are able to help with financing for vehicle repairs, especially for those who meet certain needs-based criteria. Another option is to buy a new car, which can be cheaper than repairing an old one. In addition, the newer car will likely have a lower mileage than your existing vehicle and fewer problems.
4. Speedy Cash
Often when your car breaks down, it can require expensive repairs that you may not have the cash to pay for. In a situation like this, it may be best to apply for a quick auto repair loan to cover your expenses. Unlike loans from banks or credit unions, payday loans can be quickly approved and delivered so you don’t have to go without your vehicle.
Auto repair costs can be expensive – even minor issues like new tires, smog tests or a blown head gasket can add up. Many people struggle to come up with the money for these unexpected bills, especially if they have poor or bad credit history. This can lead to predatory lenders like payday or title loan companies who often have high APRs and will sue you if you don’t repay what you owe.
If you need car repair financing but have bad credit, it’s important to find a lender with lenient requirements. For example, some personal loans offer flexible loan amounts based on your income and other factors. Additionally, some lenders allow you to add a co-signer to increase your chances of approval. However, you should be aware that some personal loan providers charge origination fees that can eat into the amount of your loan disbursement. These fees can be as high as 9.99% of the loan amount with Upgrade.