Car Repair Loans for Bad Credit: Options to Get Your Vehicle Fixed

When your car breaks down and you have bad credit, getting the money for repairs can be challenging. However, there are still options available for car repair loans for bad credit that can help get you back on the road. This guide will explore the various loan types, lenders, and alternatives to consider when you need auto repairs but have poor credit.

Understanding Car Repair Loans for Bad Credit

Car repair loans for bad credit are personal loans specifically designed for individuals with low credit scores who need to finance auto repairs. These loans typically have:

Higher interest rates compared to standard personal loans
Shorter repayment terms, often 12-36 months
Lower loan amounts, usually $1,000 to $10,000
Less stringent credit requirements
Faster approval and funding times

While the rates and terms may not be ideal, these loans can provide a lifeline when you urgently need car repairs but lack the cash or credit to pay for them outright.

Types of Car Repair Loans for Bad Credit

There are several loan options to consider for auto repairs if you have bad credit:

1. Online Personal Loans

Many online lenders specialize in bad credit personal loans that can be used for car repairs. These typically offer:

Loan amounts from $1,000 to $10,000+
APRs from 15% to 35.99%
Repayment terms of 2-5 years
Quick online applications
Funding as fast as 1-3 business days

2. Credit Union Loans

Some credit unions offer small personal loans or auto repair loans to members with poor credit. Benefits can include:

Lower interest rates than online lenders
More flexible terms and qualifications
Personalized service

3. Auto Repair Shop Financing

Many auto repair shops partner with lenders to offer on-the-spot financing. This can be convenient but watch out for high interest rates.

4. Buy Now, Pay Later Services

Some BNPL providers like Affirm now offer financing specifically for auto repairs, often with 0% APR options for shorter terms.

Top Lenders for Car Repair Loans with Bad Credit

Here are some of the best lenders to consider for car repair loans for bad credit:

Lender	Min. Credit Score	Loan Amounts	APR Range
Avant	550	$2,000 – $35,000	9.95% – 35.99%
Upgrade	560	$1,000 – $50,000	7.96% – 35.97%
Upstart	300	$1,000 – $50,000	5.60% – 35.99%
LendingPoint	585	$2,000 – $36,500	7.99% – 35.99%

According to Experian, while many lenders prefer credit scores of 670+, some work with scores as low as 550 or even 300 in some cases.

How to Get Approved for a Car Repair Loan with Bad Credit

Follow these tips to improve your chances of qualifying for an auto repair loan with poor credit:

1. Check Your Credit Report

Review your credit reports for any errors that may be dragging down your score. Dispute any inaccuracies you find.

2. Improve Your Credit If Possible

If you have some time before needing the loan, try to boost your credit by:

Paying down credit card balances
Making all payments on time
Becoming an authorized user on someone else’s card
Limiting new credit applications

3. Get a Cosigner

Having a cosigner with good credit can significantly improve your chances of approval and help you qualify for better rates.

4. Provide Proof of Income

Showing steady employment and income can help offset a low credit score. Be prepared to provide pay stubs, tax returns, etc.

5. Consider Secured Loan Options

Offering collateral like your car title can make lenders more willing to work with bad credit.

6. Shop Around

Compare offers from multiple lenders to find the best rates and terms you can qualify for.

Alternatives to Car Repair Loans for Bad Credit

If you’re unable to qualify for a car repair loan with bad credit, here are some other options to consider:

1. Save Up Cash

If possible, try to set aside money each month to build up an emergency fund for car repairs.

2. Payment Plans

Some repair shops offer in-house payment plans, allowing you to pay off the repairs over time.

3. Credit Cards

A 0% APR credit card could allow you to finance repairs interest-free for a promotional period. Be cautious with high-interest cards though.

4. Local Assistance Programs

Check if your city or state offers any programs to help low-income individuals with car repairs.

5. Borrow from Family/Friends

While not ideal, borrowing from people you know could be an option if you’re in a bind.

6. Sell Unnecessary Items

Consider selling things you don’t need to raise cash for repairs.

Pros and Cons of Car Repair Loans for Bad Credit

Consider these advantages and disadvantages before taking out an auto repair loan with bad credit:

Pros:

Get your car fixed quickly
Build credit by making on-time payments
May be cheaper than putting repairs on a high-interest credit card
Avoid risking job loss or other issues from lack of transportation

Cons:

High interest rates
Potential fees
Risk of getting trapped in debt
May encourage overspending on unnecessary repairs

Tips for Managing Car Repair Loans with Bad Credit

If you do take out a car repair loan with bad credit, here are some tips to manage it effectively:

1. Budget Carefully

Factor in your new monthly payment and adjust your budget accordingly.

2. Prioritize Repayment

Make all payments on time to avoid penalties and help rebuild credit faster.

3. Consider Refinancing

If you improve your credit over time, look into refinancing for a lower rate.

4. Be Mindful of Fees

Potential fees can add up quickly, so read the loan terms carefully and ask about them upfront.

Avoiding Common Pitfalls with Car Repair Loans

Common mistakes people make when using car repair loans for bad credit:

1. Not Shopping Around

Failing to compare offers can mean paying higher interest rates and fees than necessary.

2. Ignoring the Total Cost

Focus too much on monthly payments instead of looking at the overall cost of borrowing over time.

3. Not Saving for Future Repairs

Taking out a loan every time something breaks can trap you in debt and prevent saving for future needs.

4. Choosing Unnecessary Repairs or Add-Ons

Carefully evaluate each repair recommendation to avoid overspending on things that aren’t truly necessary.

Taking Control of Your Credit While Getting Necessary Repairs

While car repair loans can provide a lifeline for those in need, they should be used wisely. Assess your situation carefully and weigh all options before committing to any financing plan. By taking control of your credit and finances now, you’ll put yourself in better position for the future.