There’s nothing as awful as the feeling you get when you head out to go to work and your car won’t start. Particularly if you have only one vehicle for your family, a breakdown or an accident that puts your car out of commission can represent a major hardship. Car repairs are often very expensive, and when
Simply leaving the car inoperable isn’t usually an option – after all, without your car, you may not be able to get to work in order to make the money to fix it, an ironic circle that many of us know too well. But if your budget or savings account can’t cover the repair costs, there are a few types of car repair loans that can help. In addition to considering personal loans from friends and family, many auto title loan companies offer solutions that could be the perfect way to get your car fixed and back on the road.
What Is a Car Repair Loan?
A car repair loan, one of our many loan types, is a special type of loan that some title loan companies offer. These loans are designed specifically to cover the cost of repairs to a vehicle. As such, they typically come with a few restrictions, which make them different from a standard car title loan. Those may be:
Most of the other requirements for auto repair loans are the same as a standard auto title loan. This means that a borrower will have to have the vehicle’s clear title in their name, and a valid driver’s license. In some cases, the type of auto insurance the borrower carries, their income history, and the age of the car can also make a difference.
Pros and Cons of Auto Repair Loans
Whether you are trying to decide what to do very quickly because your vehicle just broke down, or you are trying to come up with a backup plan because you don’t want to experience the stress of scrambling for cash if a breakdown or accident happens, it’s always much easier when you can easily compare the pros and cons of a specific option. Auto repair loans from car title lenders do have may pros, and a few cons, that every smart borrower should consider. Pros include:
Some of the cons of car repair loans may include:
Using a Car Title Loan for Auto Repairs
If a car repair loan is not an option in your area, you may find that some auto title lenders will offer standard car title loan specifically for repairs. These loans will probably require an inspection of the vehicle in person, to assess its value, but some title lenders may simply use Kelley Blue Book or other online services to determine value. Using a standard car title loan instead of a car repair loan will likely only be a little bit different. The key things to keep in mind include:
Other than these two differences, using a car title loan for auto repairs will probably be very similar to using a car repair loan from a title lender. The requirements, benefits, and possible negative considerations, are the same. These types of loans are often one of the few options available to those who don’t have perfect credit, and who need money fast to cover repairs right away.
It’s important to check your state’s laws regarding title loans. Some states, such as California, limit the amount of fees that a title lender can charge on a loan. Other states limit the interest rate, or require that title loans be a minimum amount to be classified separately from small loans. Knowing the basic laws of your state can help you choose the best title lender, who will either offer you a great auto title loan for your vehicle, or a car repair loan to cover the cost of getting your car in working order again.
Car Repair Loan or Auto Title Loan?
If you have both a car repair loan and an auto title loan option, and the title lender you have chosen is willing to extend either to help you cover the cost of vehicle repairs, then which you should choose depends largely on your circumstances. You should probably choose a car repair loan if:
The biggest reason why a borrower should choose a car repair loan is to keep their loan as small as possible. When you borrow less money, you’ll have less to pay back overall. Interest rates may be the same, but when calculated on a smaller amount, the interest will be less.
However, if you need to cover the cost of other damages done when your car was damaged, a standard auto title loan may be a better choice for your repairs. And if the lender is willing to loan based on the car’s repaired value, you may find that the higher amount can help you cover bills from missed work until you can get your car back in working order. Whichever you choose, be sure that you work with a reputable title lender for your auto title or car repair loan.