Best Personal Loans for Car Repair
April 2024
Most people don't have the cash to pay for a major car repair and have to rely on auto repair loans. Save money where you can by comparing the rates and terms of the best auto repair loans available.
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A car repair can come with a hefty price tag, but if it’s your primary mode of transportation, you’ll need to come up with the cash to get it fixed. While a personal loan doesn’t have wheels, it may be the best vehicle to get you where you need to be financially. Here are our top picks for the best personal loans for car repairs.
Methodology
Our advanced algorithms combined with community feedback is how SuperMoney dynamically generates this list of the best personal loans for car repair. We focus on personal loans with the lowest rates and longest terms to save you both time and money.
Commonly Asked Questions about Personal Loans for Car/Auto Repair
Can I get a personal loan to fix my car?
Yes, you can. An auto repair loan is basically a personal loan that’s used to fix your car. You can use it to pay for practically anything you want. So if you're hearing some concerning car noises but your warranty period expired and you're afraid to take it to a mechanic, a personal loan may be able to help.
A personal loan is a great option for several reasons. Most lenders won’t require any collateral to back up the loan, like your vehicle or home, and depending on your financial profile, there’s a wealth of lenders who offer favorable rates and repayment terms.
The list of lenders above includes the key features you should consider when comparing auto repair loans, like APR, credit score range, and loan amount, so you can quickly see which lender you’re most likely to qualify with.
How do auto repair loans work?
Since an auto repair loan is essentially a personal loan, it works the exact same way. Let’s say you need $2,000 to cover the costs of repairing your vehicle. Once you apply and are approved for a personal loan, you’ll be able to pay the mechanic immediately for the services and spread out your payments to your lender over time.
The details, like the cost of the personal loan and repayment terms, will depend on the lender. While you’ll find some of the best rates for auto repair loans from online lenders, it’s also worth checking with your bank or credit union to see what terms they offer, especially if you’re already a customer.
What alternative methods are there to finance car repairs?
If you’re looking for alternative methods to finance your car repairs, a credit card is one option. While it’s quick and convenient, you’ll want to consider how much it’ll cost before swiping your card. Check to see what your card’s APR is. If it’s high and you won’t be able to repay the amount in full within one billing cycle, it’s probably not the best option.
If you want the ease of use a credit card offers but without the high APR, a 0% APR credit card is another alternative. These types of credit cards won’t charge any interest at all for their introductory period, which is can be anywhere from 10-21 months. This will give you ample time to pay off the balance without getting hit with fees. Just be sure to read the fine print to see what the APR will be once the introductory period is over, as it can be fairly high.
What to do if you can't afford to fix your car?
Dealing with a car repair is not only stressful but it can also be expensive, especially if you own a vehicle notorious for requiring expensive repairs. If you’re digging deep in your pockets and coming out empty-handed, you have a few options available.
- Shop around. If you want the best prices, you’ll have to shop around and compare local mechanics. While some mechanics won’t give you a quote until they see your vehicle, many will offer a rough estimate. This will help you make the best decision. It’s also worth it to run your own diagnostics test to get an idea of the issue.
- Negotiate. While big chain shops may not budge on their prices, there are plenty of small-time mechanics that may be able to work with you on the price. Speak with your mechanic and see if they offer any discounts or are willing to offer a payment plan.
- Tap into your network. If there’s anyone in your family or network of friends who’s mechanically inclined or “knows a guy”, see if you can get a better rate for the services.
- Longer terms. The best car repair loan for you may be one with a longer repayment term, which will make the monthly payments more affordable. Just know that it will cost you more in the long run due to interest.
What are the best rates for auto repair loans?
Getting the best auto repair loan rates depends on the lender and your financial profile (which includes factors like your credit score, income, and credit history). If you have a credit score of 750, you’ll probably qualify for the best rates a lender is offering.
Whether you have good credit or poor credit, use the list above to find and compare rates from various lenders.
Can you get car repair loans with bad credit?
It’s certainly possible, but you’ll be paying a higher interest rate on your loan. You’ll also find that your choice for lenders will be limited if you have bad credit.
With that said, you’re more likely to get approved for a car repair loan with better rates by adding a cosigner with great credit to your application.
Do mechanics take payment plans?
Some auto repair shops will partner with a financial institution so they can offer their customers a payment plan. Just know that the APR on these plans are often high, even if you have good credit.
If you’re reading this article, then it means you have time on your side. SuperMoney's loan offer engine takes just a couple of minutes to complete and it won’t affect your credit score.
How do I apply for the best personal loans for auto repair?
A lot depends on the lender you choose and your circumstances. For instance, if you finance through the repair shop, getting your loan may just require signing one document. However, applying for a personal loan for car repairs typically includes the following steps:
- Pull your credit report and make sure there are no errors that could be damaging your credit score.
- Ask the mechanic for an estimate of how much it will cost. You don't want to borrow more than you need.
- Do your homework and find out which lenders offer the best rates and terms. The list above is a great place to start.
- Prequalify for at least three loans to see which offers the best deal.
- Fill in the form for the loan that offers the best deal and submit your application.
SuperMoney's loan offer engine allows you to prequalify with the best personal loans for car repair without hurting your credit score.
About the Author
SuperMoney
SuperMoney is the most comprehensive financial services comparison site around. We have published hundreds of personal finance articles and provide detailed reviews on thousands of financial products and services. Our unbiased advice and free comparison tools help consumers make smart financial decisions based on hard data, not marketing gimmicks.
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