Best Auto Repair Loans – Lending When Your Car Breaks Down

Written By:

Last Updated:December 02, 2023

Best Auto Repair Loans – Lending When Your Car Breaks Down

Joy Wallet is advertiser-supported: we may earn compensation from the products and offers mentioned in this article. However, any expressed opinions are our own and aren't influenced by compensation. To read our full disclosure, click here.

For anyone who owns a vehicle, you’ve likely learned it’s not a matter of if you’ll have a car repair bill but when you’ll have to deal with one. While having our transportation can be a major gift, it does come with more responsibilities. Unfortunately, cars are only as reliable as the parts they are made of, and sometimes, our responsibilities include paying for an unexpected repair bill.

While we may not be able to guess how much unplanned vehicle repairs will cost, we can be sure we know how to cover our car needs. When the car repair cost is too expensive to pay out of pocket from savings or with a credit card, another option could be an auto repair loan. Auto repair loans are a type of installment loan and are usually personal loans marketed toward the use of auto repairs. Taking one out usually requires a good credit score, and funding may be available within one business day. Let’s look at the best auto repair loan options available.

Jump To

Best auto repair loans summary

Auto repair loan	Best For
Discover	Quick funding
LightStream	Hefty auto repair expenses
BestEgg	A wide range of loan amounts
Prosper	Ideal for good credit
Upstart	Smaller loan amounts
Avant	Less-than-perfect credit
Navy Federal Credit Union	Most loan options

Get a Personal Loan Even If You Have Bad Credit with Bankrate

Use Bankrate to Get a Personal Loan

Get as much as $100,000 with rates starting at 5.95% APR*
Use a personal loan to pay off debt, renovate your home, family needs, and more
Takes minutes to see how much you can get
Doesn't hurt your credit score to check

See how much you can get through Bankrate

Best auto repair loans

Discover

You’re likely familiar with the Discover credit cards, but the same company offers personal loans, too. You can borrow as little as $2,500 and up to $40,000 with interest rates ranging from 7.99% to 24.99% APR. Plus, Discover loans feature no origination fees and no closing costs (as long as you pay on time), and you have 36 to 84 months for loan terms.

Borrowers need a minimum 660 credit score to apply, and if approved, Discover makes the funds available typically by the next business day. Then, you have the convenience of all the digital tools it offers, which makes it easier to keep up with repayments.

LightStream

Lightstream is another option for auto repair loans, offering personal loans with interest rates ranging from 7.99% to 25.49% and amounts ranging from $5,000 to $100,000. You can use the personal loan for almost anything, including major car repairs.

LightStream offers four repayment terms, ranging from 36 to 72 months. Like Discover, you need a minimum credit score of 660 to apply. If you’re approved, there are no origination fees, prepayment penalties, or discounts if you enroll in autopay.

Read a full review on LightStream loans.

BestEgg

If you need to borrow a smaller amount for a personal loan, then BestEgg may be a smart option. BestEgg offers smaller loan amounts starting at $2,000 but can go as high as $50,000. Interest rates range from 8.99% to 35.99%, higher than others available.

Another bonus to using BestEgg is that you can go through the prequalification process by simply providing your email without a hard inquiry. A hard inquiry will occur once you see your rates and decide to move forward.

Prosper

Proper offers a loan ranging between $2,000 to $50,000 with an APR ranging from 6.99% to 35.99%. If you are approved, you can receive the funds in one business day. The loan terms range from 2 years to 5 years but you need a high credit score to get the loan application approved. The application process is simple and straight forward. Prosper also charges an origination fee ranging from 1% to 7.99% and there is no autopay discount. There are no pre-payment penalties which means you can pay off the loan whenever you feel like. If you have a credit score over 600, Prosper could be a good choice.

Upstart

Upstart offers personal loans starting at $1,000 and ranging as high as $50,000, although the minimum loan amount may be slightly higher depending on your state. The smaller loan amount is a good option for covering car repair costs. The interest rate ranges from 6.4% to 35.99%, but only two repayment terms are available — three or five years.

One benefit to Upstart is its unique underwriting model. The decision process is quick and easy (within five minutes), and you can get your funds within a business day upon approval.

Read a full review on Upstart loans.

Avant

Avant is a personal loan product that extends approval to those with lower FICO scores. However, there are higher interest rates with these types of loans, ranging from 9.95% to 35.99%. Loan amounts range from $2,000 to $35,000, making it a possible option for auto repair loans or other car needs.

Avant also includes your income and debt-to-income ratio in the loan decision process, which could help expedite your approval. If you are approved and choose to move forward, funds are typically available the next business day.

Read a full review on Avant loans.

Navy Federal Credit Union

If you happen to be a Navy Federal Credit Union member or have a military connection you can use to join, it could be worth checking out the personal loan options. NFCU offers both an unsecured (no collateral) and a secured option.

The unsecured personal loans are available in amounts as small as $250 and up to $50,000. Although interest rates start at 8.99% and increase, numerous repayment options start at 36 months.

If you have a certificate of deposit or savings account with NFCU and don’t want to dip into your savings, you can choose a savings or certificate-secured loan, using your accounts as collateral. You still earn interest on your savings, but this option gives you extended repayment terms, up to 180 months.

Get a Personal Loan Even If You Have Bad Credit with Bankrate

Use Bankrate to Get a Personal Loan

Get as much as $100,000 with rates starting at 5.95% APR*
Use a personal loan to pay off debt, renovate your home, family needs, and more
Takes minutes to see how much you can get
Doesn't hurt your credit score to check

See how much you can get through Bankrate

Who should use an auto repair loan?

Ideally, you could use your personal savings or emergency fund to cover a repair cost, but an auto repair loan may be necessary when this is not an option. Those with a good or excellent credit score will likely find the most financing choices available. Financing a car repair bill should only be used when you can pay the balance quickly (to avoid interest charges) and are comfortable with the repayment terms.

FAQs

Does getting an auto repair loan impact my credit score?

Yes, if you choose to apply for an auto repair loan, lenders will use a hard inquiry for a credit check. This type of credit check appears on your credit report and may hurt your score. The impact is typically only a few points and will drop off your report within two years of the inquiry.

Are there other auto repair financing options besides a personal loan?

A personal loan or car repair loan is not your only financing option. Depending on your credit history and financial needs, you may have other choices, such as:

Payday loans. This type of loan is a small loan with high interest rates and is loaned to you if you guarantee repayment with your next paycheck. They typically do not require a credit check.
Car title loan. If you own a vehicle and the title, you can use this as collateral for a car title loan. This may be an option for those with bad or no credit since no credit check is usually required.
Line of credit. If you have an existing relationship with a bank or credit union, you may be able to have a line of credit extended to you or may already be prequalified for this option. This allows you to borrow as you need funding, with instant access to funds. In return, you’ll make monthly payments until the balance is paid off.
Open a new credit card with an introductory APR. For those with fair, good, or excellent credit, opening a new credit card with a 0% introductory offer could help cover high repair costs without any interest. The downside is you must pay the balance before the end of the promotional period (or owe the interest).

What are the risks with an auto repair loan?

With any loan, you risk paying additional money for both interest charges and fees. Loans often come with additional fees you might not see in the slick advertising, such as origination fees or prepayment penalties. Before submitting any application, read the fine print and understand all the financial obligations associated with the loan.

Get a Personal Loan Even If You Have Bad Credit with Bankrate

Use Bankrate to Get a Personal Loan

Get as much as $100,000 with rates starting at 5.95% APR*
Use a personal loan to pay off debt, renovate your home, family needs, and more
Takes minutes to see how much you can get
Doesn't hurt your credit score to check

See how much you can get through Bankrate

The bottom line

When life happens, and you need to cover a large car repair bill quickly, an auto repair loan may be your best option. Look for loan options with the most competitive interest rates while giving you repayment flexibility and fees that are as low as possible.

Joy Wallet is an independent publisher and comparison service, not an investment advisor, financial advisor, loan broker, insurance producer, or insurance broker. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. Joy Wallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. We encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Featured estimates are based on past market performance, and past performance is not a guarantee of future performance.

Our site doesn’t feature every company or financial product available on the market. We are compensated by our partners, which may influence which products we review and write about (and where those products appear on our site), but it in no way affects our recommendations or advice. Our editorials are grounded on independent research. Our partners cannot pay us to guarantee favorable reviews of their products or services.

We value your privacy. We work with trusted partners to provide relevant advertising based on information about your use of Joy Wallet’s and third-party websites and applications. This includes, but is not limited to, sharing information about your web browsing activities with Meta (Facebook) and Google. All of the web browsing information that is shared is anonymized. To learn more, click on our Privacy Policy link.

Images appearing across JoyWallet are courtesy of shutterstock.com.

Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.

Share this article