An auto repair loan, sometimes referred to as auto repair financing, is meant to help with the costs of car and vehicle repairs. Without an extended warranty, collision coverage or substantial savings, sudden expenses like replacing broken parts or fixing accident damage can hurt your overall finances — especially if you must drive to work every day.
This challenge doesn't affect all car owners and vehicles. Many programs help to alleviate the cost of major car repairs and eliminate the need for automobile repair loans:
Without these programs, automobile owners may need to turn to a lender or creditor in order to borrow the money needed to get their vehicle up and running.
One option is a car repair loan.
Car repair loans can be personal loans, so called because the loan is made to the individual. Vehicle repair loans may be either secured or unsecured personal loans, depending on the lender. If it is unsecured, the loan typically requires a credit check. If the repair loan is secured financing, the automobile's title is often used as the collateral for the loan. In this case, the loan amount is limited to a portion of the current market or blue book value of the vehicle — this is usually called a title pawn loan or pink slip financing.
Making major repairs vs. purchasing a new/used vehicle
Depending on the type of repair that is needed, the vehicle owner should consider purchasing a new or lightly used car in lieu of fixing the current car or truck. There are a number of factors that should be considered in this situation, including:
When considering repairs that are approximately equal to or less than the value of your current vehicle, it may make more financial sense to buy a vehicle as opposed to getting your current one repaired.
Personal Loans for Car Repair
NetCredit provides personal loans suited for vehicle repair financing. You can check your eligibility in minutes — without it affecting your credit score. If approved, you’ll review personalized loan options and select the one that best fits your financial needs. After choosing your loan, funds will typically be delivered to your bank account by the next business day.