Car repair is an expensive proposition. While the initial cost of the vehicle might not be that exorbitant, bringing the same car for repair might end up costing much more. Now, if you’re really dependent on this vehicle for regular use like driving to work, picking your children up from their schools but are unable to fund the pricey repair bills, then you can consider applying for a car repair loan. As per common beliefs, a car repair loan does exist and it is meant to help those who are not able to pay the repair bills up front.
Now, in most the cases when you approach a traditional lender in order to secure a loan to fix car, he would ask you to furnish a stellar credit. A good credit report generally implies that the borrower has been financially disciplined- paying installments on time, being sincere with payment of credit card bills etc. However, please remember that these loans are exclusively reserved only for those who’re not able to pay the repair fees on time. Even if you don’t really have exceptional credit scores, you can avail these loans from private lenders.
A car repair loan is actually not very different from other debts, but the money, here, goes for the driver’s insurance deductible meant for accident repairs and vehicle repairs. There are a number of people who believe that they would never be required to go for an auto repair. However, in reality, modern cars with added facilities need costlier repairs rather than their older counterpart. In fact, the costs can even touch a thousand dollars when the vehicle has added facilities including airbags, aftermarket add-ons, and advanced technology etc. These loans are primarily availed when the borrower needs extremely expensive repairs. The lender will provide you the money in exchange of affordable monthly installments. If you’re using the money for the insurance deductible then the lender would provide you the money both for the insurance deductible and for the needed repairs.
While the car repair loan gives you an opportunity to fund an urgent expensive repair without resorting to financial aid from your family or friends or turning to a high-interest credit card- it has its disadvantages as well. Take a look at the points mentioned below in order to understand the risks that you run.
Please remember that taking out a title loan would mean that the control of the car would be taken away from you and given to the lender. While you might not see this as a huge problem, please know for a fact that only a few defaults can force the lender to get in touch with a repossession company to take the car or vehicle away. Experts also opine that if the repair fee is greater than that of the cost price of the car, then it wouldn’t really be prudent to secure a repair loan. Trading the car in or selling it off, should be the option in this scenario.