Auto Repair Financing Options to Fit Your Budget

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Key takeaways

Auto repair loans are personal loans used to finance car repairs.
Car repair financing options for bad credit include personal loans, credit cards, and short-term loans.
Compare lenders and prequalify to secure the best rates, lower fees, and faster access to funds.

Plenty of things can go wrong with a car, and when they do, you have to pay for the repairs. In a perfect world, you have money set aside for car expenses or can dip into your emergency fund. Unfortunately, the ideal is rarely reality. Bankrate found that only two in five Americans would be comfortable paying for a major expense from their emergency savings.

An auto repair loan can help you cover the cost and is usually more affordable than putting it on a credit card. You may even get the money the same day you apply.

Let’s review some financing options to get your car out of the shop and back on the road.

What are car repair loans?

An auto repair loan is any loan used for car repairs. Some lenders offer loans designated for car maintenance financing. Others provide personal loans that don’t specify what you can use them for.

Car repair loans are one place to turn when you need cash to cover the bill. You can even find same day emergency loans that will get you back on the road without much delay.

Car repair financing with personal loans

Personal loans are a flexible way to cover emergency expenses. You can use them for nearly any expense, including auto repairs. They are available through credit unions, online lenders, and certain banks.

Personal loans are often unsecured, meaning you don’t have to provide collateral. Depending on the lender, you can apply in the morning and receive your money the same day.

Most personal loans are installment loans. With an installment loan, you repay the money over a few years through fixed monthly payments. The monthly payments will include interest and fees. How much you pay depends on the lender, the type of loan, and your credit score.

If you have poor credit, expect to pay more. Lenders charge higher interest rates to offset the risk. That said, you can find personal loans for bad credit with instant approval.

These quick loans can help you cover repair costs without long delays. They often have lower APRs and longer repayment terms than payday or title loans, making them more affordable.

Tired of dealing with costly repairs?

Find out if you can lease a car with bad credit!

How to pay for car repairs with no money

If you’re thinking, “I need my car fixed but have no money,” you’re not alone. Unplanned car repairs can be financially overwhelming. According to AAA, common mechanical repairs like a complete brake job or catalytic converter replacement can run you over $1,000. That’s a lot of money for anyone, but it’s especially problematic if you don’t have emergency savings.

That’s where car repair financing comes in. Below are the most common options to consider:

Car repair financing with personal loans

Personal loans are versatile. You can use them for almost anything, including car repairs. They are often the best choice if you can qualify for decent terms.

Most personal loans are installment loans with fixed APRs of up to 36%. You can receive high loan amounts – up to $50,000 – more than enough to cover emergency car repairs. Repayment terms are generally one to seven years.

You can find personal loans for car repairs at banks, credit unions, and online lenders. Online lenders and credit unions often have more lenient requirements. Dealerships that provide car loans for bad credit may also help you finance repairs.

Auto repair loans for bad credit

Lenders created car repair loans for bad credit so borrowers with no credit or poor scores could access funds. Emergency car repair loans have more lenient requirements than traditional loans. Many lenders put more emphasis on your financial situation, income, debt levels, and education rather than your credit history.

Specific lenders do not consider your credit score or conduct a hard inquiry. Be careful; bad credit loans guaranteed approval often have high interest rates and extra fees. The APR can go well above 36%. When searching for no credit check auto repair financing near me, always check the terms carefully and ensure the lender is reputable.

Payday loans for auto repair

Payday loans are small, short-term, high-cost loans. They are easy to qualify for. Generally, all you need is an ID, a bank account, and a paycheck. You can apply and receive funding the same day.

While they are an option when you need money now, consider the risks. The high fees, equivalent to a 400% APR, and short repayment terms of a few weeks make them difficult to repay. The majority of borrowers end up rolling over the loan.

Only consider 1 hour payday loans and no credit check if you’re confident you can repay the money. Even then, these loans are best avoided.

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Car title loans

Search for car title loans near you if you own your vehicle outright and need a fast solution. These loans use your car as collateral. You often borrow 25% to 50% of its value without a credit check. They may be the closest thing to bad credit auto loans guaranteed approval.

Title loans are risky. The lender can claim your car if you do not repay the money plus fees within 30 days. The Consumer Financial Protection Bureau found that one out of five borrowers had their vehicles seized for not repaying their debts.

Like payday loans, the fees are expensive and often close to a 300% APR. Use this option only when you’ve exhausted safer alternatives.

Can't repay your debt? Check this out:

How to get out of a title loan.

Credit cards for car repairs

Using credit for car repairs can be a fast and convenient way to cover costs. The problem with credit cards is that the interest rates are high. They currently fall around a 20% APR. If you cannot pay off your balance in full by the due date, you will quickly accrue interest. A minor repair may end up costing you thousands.

The best credit cards for auto repairs are those with 0% or low APR promotional offers. Use the card to finance your repair and pay it off before the issuer charges interest. A 0% intro APR card is basically a free loan if you pay the balance off before the promotional period ends.

The easiest auto repair credit card to get will likely be one from your bank. Banks often approve customers with a good relationship with them, even with low scores.

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Pros and cons of auto repair loans

Pros:

Receive the money in a lump sum
Some lenders offer same-day or next-day funding
Flexible repayment terms may fit your monthly budget
Making payments on time can improve your credit score
Pay less interest than on a credit card or a payday loan

Cons:

Your credit score will drop slightly because of the hard inquiry
A loan will increase your debt load
You have to pay interest and fees
Missed payments will hurt your credit score

How to compare auto repair loans

When choosing an auto repair loan, don’t just go with the first offer. Take time to prequalify and consider your options.

First, compare the annual percentage rates (APRs) offered. The APR is a good indicator of costs since it includes both interest and fees. A lower APR usually means a more affordable loan overall.

Next, review the repayment terms. How long you have to repay the money impacts the overall costs. Longer-term loans have higher APRs but lower monthly payments. Choose a loan with the shortest term and the highest monthly payment you can afford. The payment must fit comfortably within your budget.

Consider the funding speed. Some lenders offer same-day or next-day deposits. Others take up to 10 business days to fund loans.

Don’t forget to read the fine print for charges like prepayment penalties or origination fees. These extra costs are usually avoidable.

Finally, read customer reviews and check sites like the Better Business Bureau (BBB) to evaluate the lender’s reputation. The best loans are from transparent lenders licensed to operate in your state.

How to get a loan for car repairs

Getting a loan for car repairs can be quick and straightforward. Here’s how to get a car loan with bad credit.

Determine how much money you need to borrow. Get an estimate for the repair costs, then look for lenders who can cover that amount.
Check your credit score. Lenders look at your credit to assess your risk. Many require a score of 690 or higher. Knowing your score will help prevent you from applying for loans you don’t qualify for.
Prequalify with multiple lenders to learn who will give you the best rates and terms. Being prequalified means you meet the basic criteria, not that you’re guaranteed approval.
Compare lenders based on the APRs, funding times, repayment terms, and loan amounts you prequalify for. Then, select the loan option you like best.
Apply for the loan you choose. Submit the application form along with the required documents. You’ll likely need proof of identity (government-issued ID) and proof of income (pay stubs or W2 forms).
Read the loan agreement and review the terms before you sign. Make sure the loan terms and APR are as expected and that you can afford to repay them as agreed.
Receive your funds. Lenders typically deposit the funds directly into your bank account. You may see the money the same day or the next day.

Frequently asked questions

1. How many auto loans can you have?

You can have multiple auto loans simultaneously as long as you qualify for them. When you apply, the lender will assess your income, credit score, and debt-to-income ratio. Some lenders have restrictions in place. They may not approve another application if you already have two personal loans or loans over a certain amount.

2. Can you finance car repairs?

You can finance car repairs with personal loans, credit cards, or specialized auto repair loans. Some repair shops also offer in-house financing or partner with lenders.

3. How can you get a personal loan for a car?

To get a personal loan for a car, check your credit score, compare lenders, and apply for the one offering favorable rates and terms. Some lenders provide loans specifically for car repairs, whereas others let you use a personal loan for any purpose.

4. Do dealerships offer payment plans for repairs?

Many dealerships offer payment plans for repairs, especially for major services. These may come through in-house financing or third-party lenders. Some plans have promotional interest-free periods, while others charge interest. Ask your service advisor about financing options before authorizing any work.

5. How can you get a loan for car repairs?

Start by getting a repair estimate to determine how much money you need to borrow. Next, compare lenders that offer car repair financing. Once you find a good option, apply for the loan. You could receive the funds the same day or within a few business days if approved.

Bottom line

Car issues can happen at any time. You’ll need to find the money to cover them when they do.

Comparison shopping makes borrowing money more affordable. Prequalifying lets you compare rates so you don’t go with the first loan you see. It may be the most expensive.

Once you’re on the road again, plan ahead. Cars always require maintenance and care. Make building up a car emergency fund a priority. When you have the funds set aside, you won’t be in the same boat again.

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18. Baggage Insurance Plan coverage can be in effect for Covered Persons for eligible lost, damaged, or stolen Baggage during their travel on a Common Carrier Vehicle (e.g. plane, train, ship, or bus) when the Entire Fare for a ticket for the trip (one- way or round-trip) is charged to an Eligible Card. Coverage can be provided for up to $2,000 for checked Baggage and up to a combined maximum of $3,000 for checked and carry-on baggage, in excess of coverage provided by the Common Carrier. The coverage is also subject to a $3,000 aggregate limit per Covered Trip. For New York State residents, there is a $2,000 per bag/suitcase limit for each Covered Person with a $10,000 aggregate maximum for all Covered Persons per Covered Trip. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

19. Car Rental Loss and Damage Insurance can provide coverage up to $75,000 for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.

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21. When an American Express® Card Member charges a Covered Purchase to an Eligible Card, Extended Warranty§ can provide up to one extra year added to the Original Manufacturer’s Warranty. Applies to warranties of five (5) years or less. Coverage is up to the actual amount charged to your Card for the item up to a maximum of $10,000; not to exceed $50,000 per Card Member account per calendar year. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

22. Purchase Protection is an embedded benefit of your Card Membership and requires no enrollment. It can help protect Covered Purchases made on your Eligible Card when they’re accidentally damaged, stolen, or lost, for up to 90 days from the Covered Purchase date. The coverage is limited to up to $10,000 per occurrence, up to $50,000 per Card Member account per calendar year. Coverage Limits Apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

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32. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

33. SpotMe® on Debit is an optional, no fee overdraft service attached to your Chime Checking Account. To qualify for the SpotMe on Debit service, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account each month and have activated your Visa debit card. Qualifying members will be allowed to overdraw their Chime Checking Account for up to $20 on debit card purchases and cash withdrawals initially but may later be eligible for a higher limit of up to $200 or more based on Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe on Debit limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime’s sole discretion. Although Chime does not charge any overdraft fees for SpotMe on Debit, there may be out-of-network or third-party fees associated with ATM transactions. SpotMe on Debit will not cover any non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe on Debit Terms and Conditions.

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36. Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.

37. Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.

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39. Funds are automatically debited from your Checking Account and typically deposited into the recipient’s Checking Account within seconds. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed.

40. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed. Non-Chime members must use a valid debit card to claim funds.

41. Not affiliated with Empower Annuity Insurance Company of America (www.empower.com). Not everyone will qualify. Offers range from $10-$300 for first-time customers; $10-$400 for all others. Offers are based on our eligibility requirements and can go up with on-time payments. In Feb 2025, the average offer was $95 for first-time customers; $187 for all others. Instant delivery is optional—see fees in Empower’s Terms. Empower offers a 14-day trial for first-time customers followed by an auto-recurring $8/month subscription fee. Cancel anytime.

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Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor's credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor's degree in journalism and an MBA.

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Auto Repair Financing Options to Fit Your Budget

Key takeaways

Jump to:

What are car repair loans?