How To Pay for Car Repairs with No Money

The High Cost of Car Ownership

The cost of owning a car can be restrictive, and many hard-working families may sometimes turn to personal loans to afford unexpected car repairs. 

You pay for the car, gas, repairs, oil changes, and insurance — By the time you get to the broken taillight or squeaky brakes, no extra money is left.

But, as any family knows, life without a car is nearly impossible. How else will you get the kids to school and soccer practice, never mind getting to work, doing the groceries, and visiting Grandma? 

Sometimes you have no choice but to swallow the cost. But a loan can relieve some of that pressure, and luckily there are many options for lenders and the options they can provide.  

How To Pay for Car Repairs with No Money

Car repairs can be a costly and unexpected expense, leaving you wondering how to pay for them when you have no money. Fortunately, there are several options you can consider to cover the expenses and get your car back on the road. Here are some suggestions:

• Negotiate with the mechanic. Talk to your mechanic and see if they offer payment plans or discounts for upfront payments. They may be willing to work with you to develop a payment plan that fits your budget.
• Look for assistance programs. Some non-profit organizations and government agencies offer assistance programs that can help cover car repair costs for low-income individuals or families. By exploring these options, you can find a way to pay for car repairs even if you have no money upfront.
• Consider a personal loan. A personal loan can give you the funds you need to cover the car repair costs. 

Options for Car Repair Loans

Your creditworthiness determines your financing options to a large extent. Check out credit reporting websites to learn more about your credit rating. 

Let's look at some of these different loans in detail to know what you're getting into. 

Personal loan

You can use a personal loan for anything, but it's handy for auto repair. A personal loan secured by your car is sometimes referred to as an "auto equity loan."

But the majority of personal loans are not "secured." We call these unsecured loans. While the lowest interest rates are only available to the most creditworthy customers, it is possible to get a personal loan even if your credit isn't the greatest or if you have no credit at all.

Title Loan

No-credit-check title loans are secured by your vehicle's title (hence the name) and must be repaid relatively quickly. 

But title loans can be risky and should only be used as a last resort. One in five borrowers of title loans had their cars repossessed because they couldn't repay their loans. 

A personal loan is a much better option and doesn't come with three times the interest rates. 

Payday Loan 

Like the above, a payday loan is usually for a small amount, must be paid back quickly, and comes with zero credit checks.

These loans are intended to be paid back from your next paycheck. Payday loans get rolled over for some people, which can be the first stop on a cycle of mounting debt. 

Credit Card

Do you have a credit card? Credit cards are an often-overlooked option to fund necessary vehicle repairs. But it should be considered a last resort. 

Ask your credit card company if you can have a higher limit for the purposes of auto repair. If your credit is at least above 580, that might qualify you for an increase in credit. 

Alternatively, you can consider applying for a new credit card with a 0% introductory APR, meaning no interest until the intro period ends.  

How Can a Personal Loan Help with Car Repairs?

Personal loans are an underused tool for getting people out of tight financial spots. Say you were in an accident and are fine, but your car is wrecked. Even with an insured vehicle, you might face expenses that only a personal loan can cover. 

It's a good idea to get collision insurance coverage. But not every car owner has it because they cannot afford it. 

The same can be said of other things like extended warranties or savings. On paper, yes, they are the best things to have. But not everyone has the means to acquire comprehensive coverage options. 

That's where a personal loan comes in handy. Auto repair emergencies are among the most significant financial emergencies faced by working-class families who depend on their cars for daily living. 

Your Life Shouldn't Stop Because Your Car Won't Start

Stranded families shouldn't have to stop their lives because their cars broke down. 

Three-quarters of American workers drive to work, and nearly ten percent drive in a carpool with friends or coworkers. It's no wonder that stranded families rank fixing a broken or damaged vehicle as their number one priority. 

Additionally, many individuals live in places where there are no good public transportation options. Bus and subway services are limited.

For these people, a car is not a luxury but a necessity. How else can they get around?

Different Types of Car Loans: Secured and Unsecured

Car loans can be unsecured or secured. 

Typically, secured loans are based on car equity. A few companies are specialists in providing customers with low-interest auto repair loans. Typically, these types of loans require security, like the title to your car. 

Companies like this offer financing over three, five, or seven years. To get optimal financing like this, you will need a lien. 

However, most people prefer the second type of loan: the unsecured personal loan. 

In fact, this has been one of the most common methods of financing auto repairs in the last few years. And that's because these loans are simple, short-term, and you don't need a lien or security to get one. They are as democratic as they come.

Secure vs. Unsecured: Which Is Better?

The answer to this depends on your credit history. 

If you have good credit, you can qualify for unsecured loans. Fair credit can often receive unsecured loans as well, so if you are averse to a bit of risk, this is often the best path. 

Why? Unsecured loans do not come with the risk that your vehicle will be seized should you fail to repay them.

Unsecured loans, however, come with higher interest rates, and often those with bad credit histories or no credit histories at all find it hard to qualify for loans without security. 

Financing Auto Repairs with a Bad Credit Rating

If you have bad credit, don't worry, you can still qualify for a cash loan today. Personal loans are perfect for individuals with no credit rating or a bad one. 

People with poor credit can find it almost impossible to receive a bank loan. And it's true when you want to purchase a car, it's a good idea to get a loan either financed through the dealership, a bank, GMAC, or a credit union. They'll give you the best interest rates. 

But a personal loan from a reputable lender can be just the ticket for emergency car repair or an auto repair loan on bad credit.

There are hundreds of different small personal loan lenders that you can easily use to finance car repairs. Plenty of lenders will also give cash loans with no credit check.

If your car is damaged beyond what's reasonable to pay in repair costs, you'll have to decide whether to get a new vehicle or a personal loan to pay for the repairs. 

Tips for Getting a Personal Loan for Auto Repair

If you choose the personal loan route, here are a few tips for finding the one that's right for you. 

Look Around

When it comes to repairing your car and getting a loan, it's essential to shop around, know the market, and research your costs and why. 

Before you pay for a replacement part, look at a place like the Kelley Blue Book to find the value of the part that needs replacing. This way, you can ensure you get the best repair deal. 

Know Your Credit Rating

Most people will need to know their credit score when applying for auto repair loans. Even if you have a bad credit rating, knowing what it is and what it means can give you a good idea of what kind of financing you can get. 

The more a person knows about their credit history, the better prepared they are when finding the right loan. And if you familiarize yourself with this information beforehand, you can save yourself a lot of trouble after the fact. 

Prequalify When You Can

Did you know that your credit score can decrease if you apply for a loan, which makes its way to the credit bureau? Getting a prequalification for an auto-repair loan can be a valuable tip to know. 

Prequalifying usually does not affect your credit scores. Usually, you can do this at subprime private lenders. You certainly won’t be able to prequalify with bad credit at banks and credit unions. 

Make Payments on Car Repairs

Right now, because the market has dropped significantly in the past few years, there is less interest in long-term car loans. Lenders are responding to this by tightening the credit requirements on long-term loans.

This means that the average buyer's credit score is higher than ever. People with bad credit should explore repair and restoration options instead of trading vehicles in and buying new ones. 

Online personal loans allow you to pay your mechanic. Even a struggling family living from paycheck to paycheck will be able to meet the qualification requirements of a personal loan.