HomeLoanWhat Are Car Repair Loans?

What Are Car Repair Loans?

Having a car is great most of the time, but there will be moments when you wish you never had one. These moments of madness usually occur when you’ve got to pay a large amount of money to get it fixed but you don’t have enough to actually pay for it. However, there are tools out there that can help you through these kinds of situations. One of the best tools you can use are car repair loans, but if you’re unsure what they are, keep reading!

car repair loansWhat Is Car Repair Loans?

Essentially, a car repair loan is a loan that allows you to pay for the upfront costs it will take to repair your car. Because it’s a loan, you’re able to repay it back over time, allowing you to manage your money way better than if you were to go into your overdraft or use your whole wages. You won’t have to miss any bill repayments because you can’t afford them after spending all your money on your car repairs either thanks to the loan. Car repair loans cover things like accident damage, MOT repairs, and even new tyres. So, as you can see, there is a lot that a car repair loan can help you with in your time of need! 

How Does car repair loan It Work? 

These loans work the same way all other loans do, so they’re pretty straightforward. You’ll apply for a certain amount of money to help pay for your car repairs, then you’ll either be approved or denied. If approved, you’ll receive the money and have to pay it back over time with interest. Like other loans, your car repair loan repayments will be determined by how much you borrow. Essentially, the more you borrow, the more you’ll pay back. Interest rates can vary too, so make sure you shop around for the best deal before committing to just one lender. Your repayments will be taken automatically each month via a Direct Debit, so you won’t have to worry about making phone calls to try and pay it off. It’s worth noting that you will most likely incur late fees and additional charges should you miss a repayment. The criteria for each lender will be different too, so make sure you understand how you fit into it before applying. This way, you’ll give yourself the best chance of being approved. 

How Much Can I Borrow? 

The amount that you can borrow will depend on numerous different factors. Firstly, most car repair loan lenders allow you to borrow anywhere between £500 and £5000 but some do allow for amounts as small as £100. It will also depend on what your affordability is as well. Lenders don’t want to offer out more than you can actually pay back, otherwise, they’ll just be losing money. The shorter the term of your loan, the higher the interest rate usually is too, so make sure you pay close attention to what yours is.

Where Can I Get One? 

Typically, car repair loans can be found online via a direct lender or a loan broker. All you need to do is a simple search online, and you’ll be presented with lots of different options. Using a comparison site can be helpful as they’ll be able to show you a rough guide of what each lender can offer you. You’ll also know that the comparison site is only showing you approved, accredited lenders too. 

If I Have Bad Credit, Can I Get One? 

Just like there are regular loans for people with bad credit, there are car repair loans to help people with less than ideal credit scores too. However, the interest rates are probably going to be a whole lot higher, as you’re much riskier for the lender to approve. This is because a bad credit score indicates to them that you can’t afford the loan and you’ve not been able to keep up with other repayments you’ve had in the past. But these lenders are out there, so if you have bad credit, you aren’t completely on your own. 

Car repair loans can be a great way for you to get your car fixed when money isn’t perhaps flowing freely for you in that moment. Sometimes car troubles come out of the blue, and you don’t always have the funds to back it up. However, a car repair loan could see you through your time of trouble and really help you get your car back on the road once again.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.