Editor's choice: OppLoans Installment Loans
- Easy online application
- Quick approval
- Long repayment terms
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Even with regular maintenance, your car will likely need to have parts repaired or replaced. If you don’t have an emergency fund to cover the cost of your insurance
deductible, borrowing a loan to cover your car repair may be your only option. Before you commit to a lender, compare your financing options to find the one that will work best for you.
|Average processing time||Average loan amount||Average payback terms|
|Personal loans||1 to 2 business days||$1,000 to $20,000||3 to 5 years|
|Mechanic financing||1 to 2 business days||Varies||Varies|
|Short-term loans||1 to 2 business days||$100 to $5,000||2 weeks to 1 year|
For borrowers with good credit, a personal loan is likely the best option. Interest rates are capped at 36%, and there are multiple online lenders that process applications in just a few business days.
If you need less than $1,000 and you’re a member of a credit union, you may also want to look into a payday alternative loan (PAL). Rates are capped at 28% with terms up to six months — and you don’t need to have the best credit to qualify.
If you have a credit card with an open credit limit, you could put the cost of a car repair on your card. Although you’ll be charged interest for the transaction, it will generally be much lower than a payday loan.
Or if you’re looking to apply for a new card, you may want to compare cards with low introductory rates. This allows you to hold off on interest payments — sometimes for as long as 21 months.
Some mechanics partner with lenders to offer financing, while others offer financing through a branded credit card. These can often be used to pay for more than just repairs — like regular maintenance — which can help prevent future problems.
But before you apply, check your other options first. Rates are often more competitive when you go directly through a bank or credit union yourself instead of through your mechanic’s third-party lender.
Short-term loans — payday, installment and auto title — are designed for borrowers with bad credit who need quick financing. While you can borrow a relatively wide range of amounts to cover a car repair, it will cost you. The APRs of short-term loans tend to be well over 300%. Because of this, consider your payday loan alternatives first to avoid getting caught in a cycle of debt.
You can use a loan for almost any car repair, including the cost of labor and parts. Some of the most common repairs are:
It’s helpful to compare estimates from different mechanics first. Labor costs vary from shop to shop, so ask for discounts and make sure you’re being offered the best labor service price to save money.
Not sure if you should repair your car or just cut your losses and buy a new one? Here are a few situations that can help you decide.
Using a loan or credit card can be a quick way to finance your car repair, but it may not be the cheapest. Here are a few tips to help you save money:
Once you’ve found a shop, stick with it. Your relationship with your mechanic is a crucial component of getting good service at reasonable prices. Find a shop you trust and visit it loyally. It will pay off.
Eventually, you’ll need your car repaired. Just like gas, you should set aside money for maintenance and repairs. A good rule of thumb is to have the full amount of your deductible stashed away in a savings account. To get started, consider downloading a savings app like Chime, which rounds up every purchase you make and adds the funds to a savings account.
Expensive car repairs can leave you stranded. But there are ways to cover the costs when you need a little extra cash for a repair. Compare personal loans before looking into your short-term loan options to help you find the best deal available to you.
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