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If you need car repair financing for an emergency that is not covered by your insurance, there are many options to consider. Let’s compare the pros and cons of each option.

AAA’s survey found that maintaining and repairing a car can run an average of $1200 per year. Only one-third of U.S. drivers have enough money to cover unexpected repairs.

1. Auto Repair Financing Using  Personal Loans

A personal loan is one of the best options. This will enable you to obtain the funds you need to fix your car. Depending on your approval by the lender, you can get funds in your checking account within 24 hours. These are a type of installment loan. 

Online lenders will offer you monthly payments to pay back the money over time. There are interest and fees that you need to pay. These can vary depending upon the lender.

Can I apply with a bad credit score?

Your credit history could impact your ability to obtain a personal loan. The loan terms and interest rates you receive will depend on your financial situation.  

Although you may be eligible to receive car repair financing, the terms and interest rate offered may not suit your needs. The cosigner will give the lender assurance that the debt will be repaid.

2. Traditional Loans: Car Repair Financing Loans

Banks and credit unions are good places for personal loans if you’re ready to compare rates. Like online lenders, you can compare terms among traditional personal loan lenders for auto repair financing to find the best rates.

You should review the terms of your loan before you apply for money at any financial institution. Look at important details like:


This represents the principal amount that you borrowed, less interest, and fees.


Additional costs can include application fees and late fees.

Interest Rate

The amount you borrow money to pay is expressed as a percentage. These rates do not include any fees or other charges associated with borrowing money.

Annual percentage rate

The yearly cost of borrowing. This includes borrowing fees, which are usually higher than your interest rate.

The repayment term

This describes the time you have to repay your loan. It is often expressed in months.


You may be able to get auto repair financing through payday lenders. Contact your credit union to learn more about alternative loans. The loans are available in amounts between $200 and $1,000. The repayment term is one to six months with a 28% interest rate limit.

3. Payday Loans

These are check-advance loans, also called cash advance loans. The lender will require a postdated check or permission to take funds from your bank account. Your next payday is what will determine the total amount of the loan and any fees.

There are risks and limitations to borrowing against your future salary. In some states, online payday loans are illegal. The maximum amount that you can borrow is restricted to a specific amount. Fees can reach up to 400%, even for small loan amounts.

 Additional fees are possible if your account does not have enough funds at the time of the payment or if the loan is extended.

4. Title loans

Title loans are short-term, risky financing options. If approved for a vehicle title loan, the lender will lend you money in exchange for your car’s name. After paying the fees and amount of the loan, you can get your car’s title back. This usually takes less than 30 days.

You are charged vehicle repossession or rollover fees if you default on loan payments. This allows you the option to defer your loan repayments.

This is a risky way to borrow money. The average APR for a car title loan is 300%. The Consumer Financial Protection Bureau found more than two-thirds of auto repair loan borrowers had their payments rolled over six consecutive times due to difficulties in repaying high-interest rates. 

According to the CFPB, 1/5 borrowers lose their vehicles because they are unable to repay the debt.

5. Auto Repair Loans With a Credit Card

A credit card is a quick and easy way for some to pay for an emergency repair. These are just some of the options that you should consider.

6. Existing Cards In Your Wallet

A credit-card credit card could cost you a lot to repair your car. A $1,000 repair at 15% APR would require 56 months and a $25 monthly repayment. This could result in nearly $395 in interest. The repair would take 67 months and would cost you $662 in interest at 20%.

We recommend that only existing credit cards be used for purchases you can afford to pay in full within one billing cycle.

7. A New Card That Offers a Low Initial APR

While using an existing credit card can lead to high-interest rates and costly car repair loans, there are other ways to get credit cards. You can avoid high-interest rates by using credit cards that offer introductory or 0% purchase APRs.

 You can avoid interest fees for purchases made within the initial period after account opening when using these cards. The introductory period typically lasts between 12 to 21 months. After the intro period, your card will be charged an annual percentage rate (APR). Any balance not paid by the end of the intro period will have the APR applied.

A credit card is a great way to finance your car repairs if you qualify for a card with an intro rate of 0% and can pay all your auto repair costs in full before the intro period ends.

8. Branded Cards From Your Auto Supply Store

Many mechanics and auto parts shops offer financing options via branded credit cards.

Synchrony has partnered up with many major auto repair chains, including Midas Auto Parts and NAPA Automotive Parts. Customers can apply for a credit card with a co-branded logo for repairs, maintenance, or other expenses.

Napa AutoCare offers customers, such as a NAPA EasyPay credit card via Synchrony. The card comes with a few perks and no annual fees.

Bottom Line

Comparison shopping does not only help you find the lowest price on jeans or the best kitchen appliance. Comparing shopping can help you find auto repair financing.

Before you apply for a loan or credit card to finance your car repair, compare quotes. Ask mechanics for pricing information before you bring your vehicle in. A written estimate might be helpful as well.

Once you’ve decided where to fix your home, it is time to compare loan offers to ensure you get the best deal.

Do not fall for the same trap. Create an emergency fund to cover your financial future.

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