a car owner looks at a repair estimate with the body shop tech.

Car owners know that repair expenses can strike at any time. Whether for collision repairs or regular wear and tear, getting your vehicle fixed can be expensive. It’s smart to plan ahead for emergencies and keep a small savings account for these types of situations, but major repairs costs are still unexpected sometimes.

For most owners these days, not having a car in working order is not an option. You need to get to work on time, run errands, shuttle kids to school and sports… So, what are your financial options when the repair estimate is more than your budget can cover this month? Find out if a car repair loan is a good option for you.

What Is a Car Repair Loan?

A car repair loan is a personal loan that can be secured or unsecured. Generally, they are used to fix damages that are estimated at $1,000 or more. Financing auto repairs means making low monthly payments over time, rather than paying off the total expense immediately.

Car repair loans can be a huge advantage for those with other bills to handle. Having fixed monthly payments and a low-interest rate can be the relief that some car owners need in order to get their vehicle fixed and stay within their household budget.

The installment loan money can be used to cover:

  • Car repairs,
  • Parts and labor,
  • Maintenance and body work,
  • Tires,
  • Insurance deductibles.

If a portion of the costs will be covered by insurance, bank loans for car repairs can help cover the deductible charge.

Can I Get a Loan to Repair My Car?

It’s necessary to qualify for a repair loan first. As with any financial decision, it’s important to get informed before making a final decision. Not all loans are the same and you may be able to secure lower interest rates, less fees, or a better payment structure by shopping around.

For unsecured personal loans, a credit check is required to determine the amount available and loan terms and conditions. A secured loan, on the other hand, leverages the vehicle title as collateral. In this case, the maximum borrowed amount is limited to the car’s Blue Book value. Title loans are often the easiest way to pay for the cost of maintenance or repairs, but they can only the car owner can apply.


Borrowers have a lot of options these days. Some dealerships and auto repair shops partner with lenders to provide loans directly to customers upon request. It’s also possible to apply for repair financing from creditors online or at your regular bank.

Not all lenders have the same approval rating, so again you may need to do some shopping to find the best solution. Get all the information you need about eligibility requirements, the application processes, loan amount options, and payback periods before signing the papers.

After getting approved for the loan, the lending agency will either pay the repair shop directly or transfer the funds to your account to cover the expenses as needed. Often money can be deposited into your checking account as soon as the next business day after accepting the loan terms.

What If I Have Bad Credit?

Your credit history is one key factor that impacts your ability to qualify for a personal loan. Even if you have been approved, your credit score will affect the terms and interest rate offered. This is why many owners wonder, “how can I get a car repair loan with bad credit?”

There is a lot of advice out there for people with credit problems. Fortunately, there are also car repair loan options for those with bad credit. Look online for lenders licensed in your state who accept all types of credit. These agencies can be easy to work with and have quick turnaround so that you don’t have to wait with your car in the shop.

Read the fine print! Interest rates tend to be very high for borrowers with a bad credit history and failure to pay back the loan as agreed can result in fee gouging and repossession of the car.

Related article: Why You Should Compare Auto Insurance Rates Every Year.

When Is a Car Repair Loan Recommended?

Emergency car repair loans should be considered if you don’t have the means to pay the repair costs out of pocket or pay with a credit card, and:

  • The car damage is estimated at $1,000 or more,
  • The damage isn’t covered by your insurance policy,
  • You have a high insurance deductible,
  • Or the car is uninsured.

Get informed about the Most Common Car Insurance Myths.

For more information from the experts on protecting and caring for your vehicle, contact Badell’s Collision or stop by our shop locations in Aston and Malvern, Pennsylvania. Our team provides exceptional collision repair service. For a quick estimate, use our online quote form.

About The Author

Scroll to Top