Yes! You can get a loan for car repairs.
Car repairs can be a big and often unexpected expense for you to deal with, and so a payday loan to fix your car could be a good option for you to help alleviate that financial burden.
Damaging your car is often not actually your fault, but the fault of someone else or faulty mechanics or technology inside your car, but as the owner or renter of a car, the cost of repairs will usually fall upon yourself.
What Can I Use a Car Repair Loan to Fix?
Cars are complicated machines! There are lots of things that could go wrong with your car, mobile home, van, truck, lorry or even your motorbike, and Dime Alley’s car repair loans will more or less cover all such issues;
- Rear-end damages;
- Faulty brakes or brake-lights;
- Crashes or vandalism;
- Engine failure or damage;
You could even use your loan to purchase a whole new automobile. This can be the best option if you find that the cost of repairs would, in fact, exceed the cost of buying a whole new or used car outright.
Can I Get a Loan To Fix My Car?
Depending on such things as your credit history, income and even your home residency, there could be different options for you to finance your car repairs.
Car or Auto Title Loans
If you are the owner of your car, truck or other automobile and you need to finance a repair, you can take out a title loan.
A title loan is essentially a form of short-term loan, secured by the title of your vehicle. Car or auto title loans are usually to be repaid in a relatively short period of time, and can often come with high interest rates, but this depends on your creditworthiness and such rates are determined by your lender.
Payday loans are another option for you to consider to finance your car repair or make your payments on an auto repair.
These loans can usually be repaid in as soon as 1 month or in up to 5 years time, and can be paid off in one-go, or in installments, if you decide that this plan better suits your needs.
Unlike car title loans, most payday loans are unsecured and therefore won’t require you to post your car, truck or motorcycle as collateral, but they can come with high interest rates, again depending on your credit and the state you live in.
Mechanic Financing for Car Repairs
Some auto repair shops work with lenders to offer direct financing for car repairs. These may even come with discounts on the parts you need for the repair. Often, they’re interest-free for a period, but if you still have a remaining balance after that period is over, you could be required to pay interest from the purchase date.
First, ask your mechanic if you’ll qualify for a payment plan. Then, make sure to read the fine print on the contract so you fully understand the terms and can afford the monthly payment.
Should I Get a Secured or Unsecured Auto Repair Loan?
The answer to this depends on your financial situation and creditworthiness.
If you have a strong or fair credit score and you can qualify for an unsecured loan for auto repair, then it’s better to get an unsecured loan, generally-speaking. This is because there is no risk of your vehicle getting seized if you fail to repay your loan, for whatever reason.
However, getting a secured loan, or in other words, posting your automobile as collateral against your loan, does have its benefits. You could get a loan with a reduced rate of interest. This is because, from a lenders point of view, you have more to lose if you don’t repay your loan, so there is more of a guarantee of you paying off your loan, in full and on-time.
Will a Loan for Car Repairs Impact My Credit?
An auto repairs loan can have an impact on your credit, but this depends on a few factors.
Firstly, it depends on the type of auto repair loan you choose. If you’re applying for a loan that requires a hard credit check, such as most personal loans and credit cards, that application will cause a small and temporary dip in your credit. However, as you make your payments on time, you may see your credit score increase past the initial dip.
When you apply for a payday or car title loan with Dime Alley, your credit won’t be impacted. This is because when you apply, we only run a soft credit check, nor do we report your payments to any of the three major credit bureaus. Our lenders also consider auto repair loans for bad credit customers.
Some installment lenders are able to offer no credit check loans and also report to the major credit bureaus. Additionally, using these lenders will allow you to pay off your loan for car repairs in installments. Therefore, means your credit score won’t be impacted by the application, but you’ll still have the opportunity to raise your score if you make your payments on time.