Auto repair loans are meant for vehicle repairs. It helps with the cost of a vehicle being repaired which has no extended warranty, collision coverage, sudden expenses for an accident, fixing damages which can otherwise make a dent in your savings. And can be very worrisome if you drive to work daily. This situation is not faced by all the vehicle owners as they already have insurances that help with the major repairs. So you do not require an auto repair loan.
New cars
When the new cars are bought they are already covered by the manufacturer and dealer warranties for fixes and mechanical failures.
Used and extended car warranties
Extended warranty gives limited cover for only a certain type of repairs in used vehicles. The warranty can be extended for an existing warranty. There are new warranties available for used vehicles.
Collision Insurance
This is provided as an option for a car vehicle insurance plan. But this can be a valuable insurance. This insurance covers the vehicle completely and the cost of repairing the mechanical body, system, if the damage is caused by an accident, after the deductibles.
With a lot of support available, the owners only require a proper lending company. You can get your vehicle repaired with the help of an auto repair loan. Car repair loans can also be personal loans as the loan is given to an individual. Auto repair loans can also be secured or unsecured personal loans, depending on the lender. The unsecured loan requires a credit check and if it is secure the vehicle’s title is used as collateral for the loan. In such a situation the loan amount is then limited to what is known as the current market or blue book value of the vehicle. It is also called a title pawn loan/pink slip financing.
Repairs/new/old vehicle
The challenge of making a decision between repairs and purchasing an old/new vehicle depends on what type of repair the vehicle has to undergo. There are number of factors involved –
- Current value/worth of the vehicle
- Cost to purchase a new/old vehicle
- Cost of the repairs
If the cost is equal to or less than the value of the vehicle then it makes sense to buy a new vehicle.
Auto Repair Loans
Auto repair loans are very handy when your car breaks down. It is doing a whole lot of work – going to work, shopping, dropping kids to school, etc. In some cases, if the cost of repairs for your car is huge, buying a new car seems cheaper. You can avail a cash advance loan for your car repairs. These are for a short term and can be taken when you need it the most.
You can obtain such a loan if you are 18, open a checking account, give proof of income, a government ID and not on active military duty. You can obtain an auto repair loan even if your credit is bad. There are various loans available across the market. There are personal loans with no credit check and regardless of your credit score. You can choose the number of days to pay off and no collateral is needed. Auto repair loans usually are short-term loans from $50 to $1500 this amount depends on your income and payment ratio, good standing in checking account and other information. 90 Days are given to repay the loan, or you can prepay to reduce the interest charged.
Bank Auto Repair Loans
Banks and credit unions also offer auto repair loans which are at the lowest rates. Almost all bank loans require strict credit checks and if they reflect negative entries, especially FICO score your request will be turned down. Even if you have great credit, you will have to wait a while till the bank makes a decision.
Payday Auto Repair Loans
Auto repair loans from payday lenders look very inviting as the processing is fast and the credit requirements are relaxed. Payday lenders give credit to anyone who has a steady income. You receive the money overnight, sometimes in a day. This advantage becomes a headache when the repayment date arrives. If you are paid every week then repayment day will be just a few days after you receive it. If you miss the payment, the lender will roll over the loan adding a new set of fees and interest charges.
