We’re automotive experts; not financial experts. But, we work with our customers to make sure they never have to go without their cars, trucks, or SUVs. If you are living paycheck-to-paycheck, you cannot afford something unexpected, such as your vehicle breaking down. The best way to avoid this from happening is to have your vehicle serviced regularly – budget for automotive preventative maintenance and get it done when necessary. If your automobile does break down, however, Credit Karma says you can also find alternate ways to pay for the repairs with financing so you’re back on the road in no time.
Take Out a Loan
Many people head to their banks to see if the bank will lend them the money to get their cars fixed. This is a good option for people who have excellent credit scores and collateral that can be used to back the loan. Your bank won’t give you a personal loan if your financing aren’t in order, including your credit score. The bank will also expect you to back the loan with something it can repossess should you default. This might sound scary but bank loans offer the lowest interest rates and best payment terms.
If you don’t fit in the category above, you can take out a loan from an alternative lender. These loans come in the form of payday loans or title loans. Credit Karma warns against these loans because they assess extremely high interest rates and demand you pay the monies back within weeks. This isn’t viable if you already cannot afford to pay for your car repairs. Another caveat of the title loan is your vehicle must be paid off because the lender takes your vehicle title as collateral for the loan.
Use a Credit Card
If you have a credit card with a low balance that you can easily pay off this option might work, but Credit Karma recommends you only use credit if the APR is zero or extremely low. Check out your card’s APR before you charge the repairs. If it’s high, try to find another credit card with a lower APR. If you have good credit, you might be able to find a card or line of credit with zero APR for six months to a year. This gives you time for financing for your vehicle repairs without interest.