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In the US, public transit sucks in most places. If your car breaks down, you probably have to repair it to get to work or risk promptly losing your job.
Given that most repair places don’t do financing, if you don’t have a credit card, you may be feeling pretty stuck. But did you know that you can get auto repair financing?
Here at our car repair company, we know that for most people, spare parts must be purchased before we can start repairing their car.
This means that most people need to invest in some kind of financing as they simply don’t have the money upfront.
Luckily, getting a loan for your auto repair is simple and straightforward with the help of the internet. Read on below to learn more about how you can get a loan without leaving home or taking up any additional space in your house and what you need to know before applying.
How Does An Auto Repair Loan Work?
Auto repair financing is easy and straightforward and comes in two different types: secured and unsecured. The main difference between these two loans is that in a secured loan, the borrower will put up an asset they own as collateral for the loan, whereas with unsecured financing, there is no asset that acts as collateral.
When taking out an auto repair loan, you can choose if you want to make your property (in the case of a secured loan) or your credit history (in the case of an unsecured auto repair loan) act as security for the repayment of your loan. The security that you offer will then either be used to reserve the balance of your loan (in the case of a secured auto repair loan), or it will form part of the overall amount that you get to borrow (in the case of an unsecured auto repair loan).
How Much Money Do I Need To Save For Repairs?
The amount you get to borrow and how much interest you pay on your automotive repair loans depends on: your credit score, your property value, and the type of vehicle you are repairing. The higher your credit score is, meaning if it’s in good standing, the more likely you are to be eligible for more financing options with lower interest rates.
The same can be said for the vehicle that you are repairing. If it’s a newer car, you will get to borrow more money because it is worth more. This means that if you want to get a lower interest rate auto repair loan, then you should consider investing in a newer and cleaner car.
What Kind Of Repairs Can Be Financed?
If you are financing any repairs to your vehicle, then they will most likely be warranty-related. This is because any other type of car repair (oil changes, minor tune-ups, or car painting) will only cost you around $100-200.
The good thing about getting an auto repair loan is that even though you are investing money in repairing your car, they still come out cheaper than what you would pay if you had to pay for the parts outright and then take the time to do the repairs yourself.
Benefits Of An Auto Repair Loan
If you are seeking financing for your auto repair, there are a few benefits that you will get from it. These include:
Flexibility is the main advantage of taking out a loan to repair your car. This is because you will be able to delay your payments over several months while still paying less than if you had to pay for everything upfront. You can then choose the payment plan that fits your budget and enables you to get the job done faster and without worrying about repaying too much money at once.
Taking out an auto repair loan will also give you more time on the job. This is because you don’t have to put up the money before you start your work, which means that you can fix any problems with your vehicle while it is being repaired. Furthermore, if something goes wrong with your car while it is being worked on by the mechanic, then this will not be an issue because of the time that has already been invested in repairing your vehicle.
Where Can I Find Auto Repair Cash Advance?
You can look online for a loan that will cover the cost, such as a $1000 personal loan. The loans are often personal or signature loans, not secured loans. So you probably don’t even need to tell the lender that you need it for automotive repairs per se.
Because of the amount of money involved, these are typically Installment Loans that get paid off over a period of some months. This might be anywhere from three months to a year. It’s usually too much money for a payday loan.
So you probably won’t actually be looking for a product called “Auto repair financing.” Instead, you might be looking for something like 90-day installment loans.
What Should I Consider When Shopping For An Auto Repair Loan?
To get the best deal and save the most money possible, you should try to find a loan option that offers:
A fixed interest rate. This will help you to easily estimate how much money you will be spending on the repairs of your vehicle. A fixed rate will also save you from having too high or too low an interest rate for your auto repair loan. This is because it gives you a pre-determined amount that won’t be affected by any changes in the market price of money.
A longer payment period of between 24 and 36 months is preferable because it gives you more time to pay back your debt and hence reduces your overall payments and total interest paid on your car loans.
A longer loan period also makes your auto repair loans cheaper than they would otherwise be because it gives you a much lower monthly payment and hence reduces the amount of interest that you need to pay over the lifetime of your loan.
A small down payment. This helps you to reduce the amount that you need to pay upfront and can also give you a better interest rate. Make sure that your down payment is equally divisible into installments (fixed payments) that will cover your total loan amount, and then begin paying back the rest of the money until your final installment comes due.
A short repayment period. This ensures that you can pay off your loan as quickly as possible. Paying off your loans early is good for your credit score because it improves your repayment history and makes you look like a better borrower than someone who doesn’t repay their debt on time.
What Do I Need To Do To Apply For Auto Repair Loan?
First, you need to be a legal adult. If you are sixteen and can drive, that’s cool, but you can’t apply for a loan (unless you are an emancipated minor). You also need to be either a citizen of the US or a legal resident.
If those things are true, the next step is gathering together some papers. The first thing you will need is identification, such as:
- Driver’s license.
- State issued ID card.
- Military ID card.
- Student ID card from a college or university.
- Tribal ID card.
You will also need some kind of paperwork showing the ability to pay. This might be a PDF of a recent bank statement downloaded from your online bank account. It might be a recent pay stub or other documents showing your income.
This might be earned income or unearned income. So it might include alimony (but probably not child support, which legally is for the child in question), Patreon money, 1099 contract work, wages, tips, and so forth.
But Can They Take My Car If I Default?
Maybe. It depends on how you arrange for auto repair financing.
If you get a title loan to cover the repairs, then the car would also be security for the loan. Om that case, yes, they could take your car if you default.
But if you get an unsecured loan, no, they can’t take your car.
Apply Now For Auto Repair Financing
TheGuaranteedLoans is a loan matching service. We help people find the loans they need.
You fill out one set of forms, then we compare what you told us to the files we have on lenders and their products. If there’s a match, they contact you.
Final Word
Auto repair financing is great because it allows you to fix up your car without needing to save up an enormous amount of money beforehand, which of course, most people don’t have. It also allows you to save money by spreading out the payments over several months or years, depending on how much you get to borrow and how long of a payment plan they offer.
The best way to find the best auto repair loan is by doing some research online.
FAQ
Yes, you can. Normally, taking out a loan for your car with bad credit is more difficult than doing so with good credit. However, if you have a particularly low score or some other special circumstance that makes you especially risky as a borrower, then it is possible to do so. Just keep in mind that this will mean higher interest rates and less favorable terms than someone with perfect credit would get.
Most car repossession loans are for repairs of vehicles that are under warranty, but some lenders may extend the loan to cover cars that are not under warranty. Other than that, there isn’t really a limit on what else you can get repaired with your auto repair loans. You might need to pay for some parts upfront and then get reimbursed later on, but you can still use auto repair financing to cover any number of expenses.
It really depends on how you are planning to use your auto repair loan. If you are planning on getting a fairly large loan, then taking out auto repair financing is likely better than using a credit card for larger purchases. This is because it will allow you to pay off your debt in several installments that you can easily afford without ending up with high-interest rates like an unsecured personal credit card. If you want to make small repairs or even get one part replaced, then it might be better to use an installment credit card instead. These cards usually have much lower interest rates and can even offer rewards for making certain types of purchases like home improvement or car repairs.