Mechanical breakdowns happen eventually to everyone. You have many places to turn if you need money immediately to fix your car.
However, getting emergency car repair financing means looking in the right places. You cannot waste time with application denials or approved amounts below the estimated cost.
People with bad credit history must be incredibly selective because their approval odds are much lower. Keeping the debt-to-income ratio low, repayment terms short, or pledging collateral can speed things up.
Young adults without an established borrowing history also face poor approval chances but can accelerate the process by exploring no-credit-check options.
Emergency Money for Car Repairs
Drivers often need emergency money to pay the mechanic or service center for car repairs. Many of us rely on our vehicles to commute to work and need a fast answer to our financing needs.
Learn about the primary financing options to avoid costly delays.
Personal Loans
Emergency car repair loans help you raise money quickly to pay the mechanic. Personal loans are unsecured and operate online to speed up the process.
- Unsecured personal loans do not require time-consuming paperwork to verify pledged collateral, such as a vehicle title or home appraisal.
- Online personal loans operate through a vast network of agile lenders. Sheer volume decreases the chances of time-consuming denials.
Request an unsecured personal loan online. (Affiliate Link) Select auto repair as the reason you want to borrow the money. Ensure a fast answer using this information when completing the online web form.
- Income from employment or government benefits
- Employer contact information
- Bank account and routing number
- Verify your identity
- Enable the lender to wire money
- Permit monthly drafting to ensure prompt payment
Financial Assistance
Finding help with car repairs is challenging to find when time is of the essence. It may not be your best way to raise money swiftly because the process often takes a long time.
Emergency car repair assistance is scarce because churches and charitable organizations have limited resources but a high demand for free services. Government programs through DHS move at a turtle’s pace.
However, financial assistance for car repair may be the only avenue for people with a bad credit history because borrowing money may not be an option. Financing approvals might be scarcer.
Credit Cards
Credit cards for auto repairs feature several hidden financing twists for drivers needing emergency money to fix their jalopy. Credit cards are revolving contracts featuring flexible monthly payments.
- An existing general-purpose credit card is the fastest way to pay for your auto repair, provided you have sufficient open-to-buy to cover the estimate. Open-to-buy is the account limit minus the current balance.
- Applying for a new credit card limited to auto repair needs could result in a denial because the bank will pull a copy of your consumer report and consider your FICO® score.
- Service centers offer credit cards for auto repair by referring customers to a third-party finance company. In other words, the revolving account managed by another entity acts as their “payment plan.” See below.
Payment Plans
Taking your broken-down vehicle to a local auto repair shop with payment plans allows us to illustrate three crucial concepts about borrowing emergency money.
Third-Party
First, mechanics do not do payment plans because they specialize in diagnosing and fixing problems with engines, suspensions, transmissions, etc. Instead, they refer customers to third-party finance companies who are experts in credit underwriting, billing, and collections.
Would you stop by your local bank branch and ask if they repair cars? Of course, that would be silly. They would refer you to a service center.
Cost Estimate
Second, the service advisor provides a cost estimate after your car is put on the garage lift. Therefore, taking your vehicle to a repair center with third-party payment plans allows you to request an appropriate amount.
This way, you do not borrow too much or too little money.
One Chance
Third, mechanics with payment plans refer customers to one finance company that might reject your application. Therefore, people with poor borrowing credentials should make arrangements before taking their vehicle to the shop.
Consumers with an adverse history on their credit report cannot wait until the last second to arrange financing and need to explore the specialty options outlined next.
Car Repair Financing for Bad Credit
Drivers with bad credit history can get emergency car repair financing by minimizing default risks to the lender. Banks are more likely to approve applicants quickly when the debt-to-income ratio is low, repayment terms are shorter, or when you pledge collateral.
Installment Loans
Emergency installment loans are the holy grail of auto repair financing for consumers with bad credit because you repay the lender over months instead of weeks. In other words, they are easier to afford – if approved for longer terms!
A low debt-to-income ratio offsets a credit report with derogatory history (charge-offs, bankruptcy, repossessions, etc.). Keeping the monthly payment small helps with this crucial underwriting percentage.
Bad credit installment loans with low monthly payments have longer terms. The logic follows basic math. Follow this simple example for a $1,000 original principal.
| Loan Term (Months) | Principal Only Installment |
|---|---|
| 1 | $1,000 |
| 2 | $500 |
| 3 | $333 |
| 4 | $250 |
Payday Loans
Emergency payday loans are a viable auto repair financing option for bad credit drivers because they feature short repayment terms. Lenders are more likely to approve requests quickly because the balance is due within weeks, posing less default risk.
Payday loans are relatively small because you get an advance on a percentage of your next paycheck. Therefore, they work better for modest repair jobs such as replacing brakes and rotors, oxygen sensors, ignition coils, thermostats, spark plugs, etc.
Payday loans are high-cost financing contracts. You do not have to pledge collateral (the equity in your home or car) to get money quickly. However, the balances can rapidly balloon if you roll over (pay less than the entire balance) the obligation too many times.
Title Loans
Emergency title loans are a viable auto repair financing alternative for people with bad credit scores because the equity in your vehicle secures the contract. Lenders are more likely to approve applicants because they can repossess your car should you default.
Title loans allow you to borrow more money because they are secured, making them ideal for bad-credit drivers who need to make expensive repairs to engines, transmissions, airbags, hybrid batteries, etc.
Title loans also have high costs and short repayment terms, so avoid rolling over the obligation too often. You must own the vehicle free and clear without encumbrances (liens or balance owed on a car loan).
No Credit Check Auto Repair Loans
Younger drivers might need emergency auto repair financing without a credit check because they have not established a file with traditional agencies (Experian, TransUnion, Equifax). Many cutting-edge lenders design offerings for unbanked consumers.
Loans No History
No-credit-check auto repair loans can help young drivers establish their consumer report while raising emergency money to pay the mechanic. You can kill two birds with one stone.
Loans for 18-year-olds without credit history do not require a consumer report or score to qualify. Lenders will consider other data such as apartment rental, utility, and phone bill payment history.
Pay for your car repairs in equal monthly installments. The lender will report the positive history to the three primary credit bureaus (Experian, Equifax, and TransUnion), helping you with future borrowing needs.
Fix-Now-Pay-Later
Young adults also gravitate towards fix-now-pay-later schemes to finance emergency car repairs without a credit check. This alternative works well for inexpensive jobs to get your vehicle back on the road.
Buy-now-pay-later lending is arriving at auto service centers as companies such as Klarna, Affirm, Afterpay, and others expand their retail partner networks. In other words, the programs are another third-party-enabled payment plan (see above).
Most fix-now-pay-later schemes will follow these basics.
- No credit check is needed to qualify
- Loans range from $50 to $1,000
- Interest-free credit
- Paid back in four installments
