Key Takeaways:

  • Millions of Americans cannot afford their car repairs and need financing to pay for them
  • An auto repair loan provides the funds needed to handle important car repairs
  • Personal loans, title loans, and payday loans are options to finance car repairs
  • Check a loan’s interest rate, origination fee and term to choose the find the best loan

If your car needs repairs and you don’t have the cash, you’re in good company. According to AAA, 64 million Americans cannot afford unexpected car repairs. They state that owning and operating a car costs an average of $8,500 a year, and the average repair can set you back $500 – $600 or more. It’s understandable why many car owners need car repair loans to handle the costs.

What is an Auto Repair Loan?

An auto repair loan is a loan with funds you can use for any purpose, such as car repairs. They can be secured, which means you put up collateral for the loan. If you miss payments, the lender can take the asset. However, some auto repair loans are unsecured, which means there is no collateral at risk, but they often have higher interest rates or fees.

Tip: What You Should Be Aware of When Choosing Auto Repair Loans

When choosing an auto repair loan, look closely at its rates, fees, and terms. Select a loan with an affordable monthly payment that will not increase the repair cost excessively but will provide the funds fast. Use this title loan calculator to see how different loan options fit your budget.

Types of Auto Repair Loans

When choosing the right auto repair loan, it’s essential to understand your loan options and how to increase your chances of loan approval.

Personal Loans

Personal loans are unsecured and usually come from banks, credit unions, or online lenders. However, most lending institutions require good credit to approve personal loans, so they can be harder to get. 

Personal loans are installment loans. This means you repay the loan in equal monthly payments over the loan term. To determine your eligibility, lenders look at your credit history, score, and debt-to-income ratio. The more debts you have, the harder it is to qualify. 

Payday Loans

Payday loans are short-term advances of your upcoming pay. Most lenders require full payment on your next payday plus interest, which can be as high as 400%. Most borrowers cannot repay the amount owed in full and end up in a debt cycle with increasing costs each time they renew the loan.

Title Loans

Title loans are options for borrowers who need fast cash and have low credit scores. These loans focus on your car’s value and ability to repay the loan rather than your credit history. They check your credit, but it’s not a determining factor for the loan. However, they charge high interest rates and have short terms, so try exhausting other options before choosing them.

Credit Card

Credit cards may be an option to finance car repairs, but like payday and title loans, use this option cautiously. Credit card interest compounds daily, so your balance increases fast if you only make the minimum payments. You can finance your repairs without paying interest if you have a credit card with a 0% APR or qualify for one.

How to Compare Auto Repair Loans

If you need a loan for auto repairs, compare your needs and options to find the right loan.


Some loans have lower APRs than others. Compare the interest charges and origination fees charged on each loan. Next, compare how much interest you’ll pay over the loan term. The lower the APR is, the less the loan costs overall.

Loan Terms

The repayment term refers to how long you have to repay the loan. A longer-term loan offers lower monthly payments. However, you’ll pay more interest over the life of the loan. A shorter term has higher monthly payments but may cost less overall. Compare the payments to what you can afford to decide.

Maximum Loan Amount

Each loan offers a different loan amount based on your qualifying factors. Determine the cost of the car repairs minus any money you have to cover some of the costs. Compare the amount you need to each loan option available.

Funding Speed

Time is of the essence when borrowing money for an auto repair. Compare the funding times of the loans available to you to get the funds the fastest. Some loans offer same-day funding, helping you get your car back the fastest. 

What do Auto Repair Loans Cover?

Auto repair loans can cover the cost of almost any car repair. Here are some examples:

  • Oil changes
  • New tires 
  • Transmission replacement 
  • A/C repairs
  • Repairs to pass emissions
  • Repairs after an accident


How do you Apply for Auto Repair Loans?

Many auto repair loans, such as personal and title loans, allow online applications. However, you can apply for these loans in person with some lenders if you prefer. The key is to find loans that fund fast so you can cover your repair costs.

Can you get an Auto Repair Loan with Bad Credit?

Yes, you can get an auto repair loan with bad credit. While getting approved for a personal loan with bad credit can be challenging, payday and title loans don’t rely on high credit scores. The key is to compare your options, including each loan’s total cost, to determine the best option.

Are There Auto Repair Financing Loans Available?

There aren’t loans specifically meant for auto repairs. However, some auto repair shops may partner with lending institutions to offer customers financing options for auto repairs.

Final Thoughts

Needing fast cash for auto repairs can feel overwhelming, especially if you don’t have great credit. Fortunately, there are options to secure the funds you need, including an auto title loan. Contact us today to learn more about how they work and to receive a free quote to compare to your other financing options.