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If you need to repair your car, but you have bad credit, an auto repair loan may be a good option. Different lenders offer a variety of terms, interest rates, and fees.
Some auto repair shops partner with retail card issuers to offer branded cards that help customers finance repairs. These cards typically have a 0% intro APR period, and funding generally occurs within one business day.
1. Credit cards
Credit cards can be an excellent option for financing auto repairs, especially if you have a fair credit score and history. They offer the convenience of same-day financing, and they allow you to pay off expenses over time, reducing the total cost of the repairs. Some credit cards even come with a zero-interest introductory period. However, you should always make sure that you have the means to pay back what you owe on a timely basis.
Many auto repair shops and automotive chains have in-house financing or partnership agreements with lenders that can help their customers finance their car repairs. These programs usually involve a branded credit card such as Synchrony Car Care that can be used exclusively at the specific store. These types of credit cards are easy to get and often have generous credit limits that can cover a significant portion of your repair costs.
Another option is a personal loan, which offers more flexibility when it comes to repayment terms and interest rates than a credit card. These loans are typically available through local banks and lenders, and you can usually apply online with minimal paperwork.
2. Shop payment plans
Auto repair financing can be a fast, easy way to get money for car repairs. But it’s important to shop around to make sure you’re getting the best deal. For example, some lenders may charge fees for prequalification or a credit check, and some types of loans have high interest rates.
For those with good or fair credit, personal loans are often a better option for car repair financing than payday loans or title loans. These types of loans typically don’t require collateral, so they can be easier to qualify for and have lower interest rates.
Other options include asking for help from friends or family members. If you can do this without putting too much strain on your relationship, it can be an effective solution. Just quick cash loans online be sure to set up a payment plan in advance so you can avoid any potential disagreements in the future. Also, remember that if you borrow from a friend or family member, it’s important to be able to pay them back on time so they don’t feel the impact of late payments on their own credit score.
3. Asking for help
Auto repair loans for bad credit offer a quick way to fund car repairs, with the money typically available within a few business days. They also allow you to pay off the loan over time, helping improve your credit score with on-time payments. However, they often come with higher interest rates and fees than other lending options.
Most car repair shops recognize that their services are expensive, so they usually offer payment plans. These can be a great option, but make sure to check your insurance policies and any available savings accounts to see if the work is covered.
Generous friends and family members may be able to lend you the funds you need for emergency car repairs. Just be careful to clarify whether it’s a loan or gift, and set firm repayment schedules to avoid souring your relationship. If you haven’t already, start building an emergency savings account to cover these unexpected expenses. The more you save, the less you’ll need to borrow in a crisis. Then, if you do need to borrow, the least costly option is likely a personal loan with low-interest or no-interest introductory rates.
4. Personal loans
Depending on the lender, you may be able to get an auto repair loan with bad credit. Many lenders require a certain credit score to qualify and may also look at your debt-to-income ratio to see how much you can afford to pay back. You can improve your chances of approval by getting prequalified with multiple lenders, which typically involves a soft credit check and doesn’t affect your score.
You might also consider personal loans, which come with borrower perks like flexible terms and competitive rates. Some personal loan lenders even have a dedicated product for auto repair, though these can often be more expensive than other options.
You can find a variety of personal loan lenders that offer auto repair loans, including PenFed, SoFi, Upstart and First Tech Credit Union. However, you’ll want to research each lender to ensure they meet your credit and income requirements and provide the funds you need. In addition, you’ll want to ensure the lender reports your payments to the major credit bureaus, as this can help you improve your credit scores over time.
5. Other options
There are a few different options to consider if you don’t have enough cash on hand for your car repair bill. A personal loan can be a great option, especially if you are able to get a competitive rate and pay it off on time. However, if you already have significant debt, it could add to your burden.
Another option is a short-term installment loan that can be used for auto repairs. These loans typically come with low interest rates and short repayment terms. However, you may still be required to undergo a credit check.
Finally, you can also use a 0% intro APR credit card to finance the cost of your car repair. Just be sure to only spend what you can afford to pay off within one billing cycle. Otherwise, the interest on your balance will be expensive and you could end up paying more in the long run. To avoid this, you should only use a credit card for emergencies or to purchase necessary items like a tire replacement. For other expenses, you should explore alternative financing options.