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Yes – you absolutely can get a loan to pay for any car repairs.

Car repairs are typically unexpected and are generally large expenses. The double financial whammy. You typically don’t have this money sitting around in an account and so a short-term loan can be the only solution. It will help get rid of the short-term financial stress and get you back on the road – essential if you need your car to get to work or to move your family around.

Even though the car typically breaks through no fault of your own, it is up to you to repair it.


What Can I Use My Car Repair Loan For?

Cars are complicated – there are many things that can go wrong. And the older the car is, the more likely that you are going to have issues at some point. It could be an issue to your car, truck, SUV or even a motorcycle. A loan with Capital Bean will help you pay for the following issues:

  • Damages from getting rear-ended
  • Crashes
  • Vandalism including window break-ins
  • Engine failure
  • Flat tires
  • Faulty breaks
  • Electrical issue

You could even use a loan to buy a new car. We wouldn’t suggest this as it would probably be cheaper to use financing from a dealership, but if you need something quick to get back on the road and you have poor or very poor credit – this could be a good option.


What Are My Options For Auto-Repair Finance?

The number of factors will determine what type of loan you can get. A lender will look at your income, credit history, and whether you own your home or are a renter. There could be a range of options available depending on your own financial situation.


Auto or Car Title Loans

If you own your car, truck or automobile and you need to finance it then you can take out what is called a title loan.

A title loan is a short-term loan that is secured. A secured loan is when the value of the loan is secured against something that you own – in this case it would be your car. Car title loans usually need to be repaid in a short period of time and also come with high-interest rates. The terms and conditions of your loan will depend on your credit history and each rate will be different for each borrower.


A title loan is a type of secured loan that is secured against the value of your car or vehicle.

Payday Loans

A second option to fix your car is to use a payday loan. This is another short-term type of loan that could help cover an auto bill or other type of car repair.

A payday loan is usually repaid within 1 month or up to 5 years in time. You have two different options – you can either pay it all off at once or pay it off in installments. If you pay it off in installments it is called an installment loan. This can work well if the amount is more than you can pay off all at once.

The difference between a car title loan and a payday loan is that a payday loan is unsecured. This means that there is no collateral against the loan and so you won’t need to put up your car or truck as security. The flip side of this is that they come with higher interest rates but this also depends on your credit score and what state you are resident in.


Mechanic’s Financing

When you are looking for a garage to repair your car you might want to search around and see if they offer mechanic’s financing. Some mechanics offer to finance directly to customers and it might even include discounts or the parts that you need to fix your car. They are typically interest-free for a period of time and if you haven’t paid it all off after that time period then interest will start to be charged.

When you first talk to your mechanic you should ask whether you qualify for a payment plan. Make sure you read the terms and conditions on any contract that you sign as you want to make sure that your repayment terms are what you think you are. Also, make sure that you can afford the monthly repayments and they won’t tip you into more debt.


Should I Get A Unsecured or Secured Repair Loan For My Car?

This is never a straightforward answer as it depends on your own circumstances, your financial situation, and your credit history.

If you have a strong or good credit rating then you will probably be approved for a secured loan. Typically this can be a better option because there is no risk that your car or truck will be seized.

If you take out a secured loan on the other hand then you will need to post something as collateral – it might be your car or could be another valuable that you own. A secured loan does have benefits as you could get a reduced rate of interest. The reason you’ll get a lower rate of interest is that a lender sees you as a lower risk because if you default on your repayment they’ll be able to claim your car as payment.


If I Get A Loan For Auto Repairs Will It Impact My Credit?

A car repair loan can impact your credit score but it depends on a couple of things.

Depending on whether you go for a loan that requires a hard credit check – this is most personal loans or credit cards – this will cause a temporary and small dip in your credit as this mark will be recorded on your file. After you make your monthly repayments on time your credit score will increase back to where it was and could even be higher than it was before.

If you apply for a car title loan or payday loan with Capital Bean your credit won’t be impacted – this is because we run a soft credit check on your file when checking.

If you go for an installment loan then we are also able to offer a no credit check loan and won’t report to the credit bureaus. This means that your score won’t be impacted and you can even raise your score if you make your repayments on time.


Richard Allan

Richard Allan

Richard Allan is the founder of Capital Bean and a passionate writer about personal finance, budgeting and how to save money at home and work.

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