7 Auto Repair Loans For Bad Credit

My nephew knows all about auto repair loans for bad credit because he’s gotten several of them from me. He’s a very nice young man, but he has a nasty habit of repeatedly crashing his trucks, cracking engine blocks, and destroying transmissions. 

According to the AAA, “While maintenance costs on most modern cars are relatively low, common repair costs average $500 to $600 and in many cases go much higher.” I can attest to the “much higher” part. 

This article describes how to pay for vehicle repairs through various loans and credit. You’ll find it valuable reading if you have bad credit. Oh, and I’ll be sending a copy to my nephew, who’s otherwise a great guy.

When folks depend on their cars, the need for a sudden repair requires emergency car repair loans. The following companies are in the business of quickly finding lenders for consumers with bad credit. They work with an online lending partner network to facilitate personal loans that you can use to repair your vehicle.

These services don’t charge fees or do a credit check to prequalify you for a loan, although direct lenders may perform a credit check before sending you a loan offer.

You are under no obligation to accept a loan offer. You’ll be presented with a loan amount, repayment length, and the interest rate, and then you can decide whether to accept the loan.

When you face large vehicle repair bills, a credit card with a relatively low interest rate will make it less painful to finance the repair cost over several months. By “relatively low,” we mean an APR below 25%, which is about the best you can expect from an unsecured credit card for bad credit.

5

Arro Card

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Arro Card

4.0/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

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★★★★★ 4.0/5.0

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• No hard inquiry to apply.
• Apply in 5 minutes or less.
• Get up to $300 with the unsecured Arro Card. Grow your credit line up to $2,500.
• Earn 1% cash back on gas & groceries, including Walmart and Target
• Instantly increase your credit limit as you master your personal finances in the Arro app.
• Reports to all 3 credit bureaus.
• The Arro Card is issued by Community Federal Savings Bank, member FDIC, pursuant to license by Mastercard International.

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Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR 24.99%

Annual Fee $60 (discounted in Year 1 for starting credit lines under $300)

Credit Needed All Credit Types Accepted

6

Aspire® Cash Back Rewards Mastercard

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Aspire® Cash Back Rewards Mastercard

4.5/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

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★★★★★ 4.5/5.0

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• Earn Cash Back Rewards* – 3% on Eligible Gas, Groceries, and Utilities, and 1% on All Other Eligible Purchases
• Up to $1,000 credit limit subject to credit approval
• Prequalify** without affecting your credit score
• No security deposit
• Free Access to your Credit Score†
  *See Program Terms for important information about the cash back rewards program.
  ** Prequalify means that you authorize us to make a soft inquiry into your credit history (that will not affect your credit) to create an offer. If you accept an offer a hard inquiry will be made. Final approval is not guaranteed if you do not meet all applicable criteria (including adequate proof of ability to repay). Income verification through access to your bank account information may be required.
  † Your credit score will be available in your online account starting 60 days after your account is opened. (Registration required.) The free VantageScore 4.0 credit score provided by TransUnion® is for educational purposes only. This score may not be used by The Bank of Missouri (the issuer of this card) or other creditors to make credit decisions.

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Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR 36% Fixed

Annual Fee $85-$175 first year, $229 thereafter

Credit Needed Poor, Fair, or No Credit

7

Fortiva® Cash Back Rewards Mastercard

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Fortiva® Cash Back Rewards Mastercard

4.5/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

See Our Review»

Ashley Fricker Senior Editor

Close

★★★★★ 4.5/5.0

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• Earn Cash Back Rewards* – 3% on Eligible Gas, Groceries, and Utilities, and 1% on All Other Eligible Purchases
• Use Anywhere Mastercard is Accepted
• No Security Deposit
• $0 fraud liability**
• Free access to your Credit Score†
  *See Program Terms for important information about the cash back rewards program.
  **Fraud liability subject to Mastercard rules.
  † Your credit score will be available in your online account starting 60 days after your account is opened. (Registration required.) The free VantageScore 4.0 credit score provided by TransUnion® is for educational purposes only. This score may not be used by The Bank of Missouri (the issuer of this card) or other creditors to make credit decisions.

Show MoreShow Less See application, terms and details »

Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR 36% Fixed

Annual Fee $85-$175 first year, $229 thereafter

Credit Needed Poor, Fair, or No Credit

Depending on your credit score and income, the initial credit limit for these cards may be less than $1,000. So, depending on how much you need to fix your car, a credit card may not be your best option. Not to mention the high interest rates for subprime applicants.

Many automobile repair shops offer special auto repair financing options. For example, mechanics may partner with local lenders to provide their own auto financing for repairs, sometimes with an interest-free or interest-deferred loan option.

Large brand-name repair shops frequently offer co-branded credit cards as a financing option for purchases and auto repairs. 

For instance, Firestone offers a card you can use to finance repairs of $149 or more with a deferred APR of 28.8%, and Midas International has a similar card with a $199 minimum purchase requirement.

Many shops provide special discounts and promotions to save you money on repairs. Meineke Car Care Centers frequently offer discount coupons for auto repairs and service.

Independent mechanics tend to give the best deals to help them compete against national brands. Costco members enjoy a 15% discount on repairs at a nationwide network of automotive service shops.

Almost all new-car automobile dealerships have their own repair operations that offer expert service. Dealerships tend to charge the most for vehicle repair, but many provide myriad discounts and warranty plans to save you money. 

Your dealership may offer you an auto repair loan, but may require you to secure the loan with the vehicle’s title. A title loan is risky because you could lose your vehicle. When you fail to repay a title loan on time, the lender can repossess it without going to court.

It can be challenging to arrange an auto repair loan when your credit problems result in a credit score of 500 or lower. Your best bets include:

• Personal loans for poor credit: We’ve included five loan-finding services in this review to help you obtain personal loans for car repairs (or for any other reason). These companies specialize in serving subprime consumers and work hard to find you a willing lender. These loans allow you to arrange an affordable monthly payment schedule by extending the repayment period. You may be able to qualify for business loans as well. 
• Local mechanics: An independent repair shop knows it must compete against the “big boys,” including national repair franchises and automobile dealerships. Many offer flexible car repair financing regardless of your credit report and score. It’s a good idea to check whether a shop uses certified mechanics before entrusting your car to it.
• Credit unions: Belonging to a credit union assures you of a sympathetic ear when you request a loan. This type of financial institution is nonprofit, and its members are also its owners. If your credit is really bad, a credit union may arrange a secured loan on your behalf. A couple of examples are Navy Federal Credit Union and First Tech Credit Union.
• Store credit cards: Your local repair shop or chain may offer you a closed-loop credit card that can only be used at its stores. These kinds of cards are easy to get due to their limited risk – you can’t use them elsewhere, nor do they provide cash advances. Typically, these cards have high APRs and modest credit limits that may not cover the cost of expensive repairs. One example is the Goodyear Credit Card, although our experts give it a less-than-flattering review.
• Secured credit cards: The easiest to obtain, secured credit cards depend on cash collateral rather than credit scores to approve applicants. Some have high credit limits, but you must have the cash available for the deposit to acquire a secured card, making it a not-so-great option when you’re seeking a loan.
• Unsecured credit cards for bad credit: Many open-loop credit cards serve the subprime community. We review three unsecured credit cards above. You may be able to get one of these cards despite having a 500 credit score if your recent credit history is clean and you earn sufficient income.
• Payday loan: We do not recommend you take out a payday loan to finance car repairs due to the ultra-high interest rates and short repayment terms. A payday loan is the most expensive type of short-term loan.

As you can see, having bad credit need not prevent you from obtaining auto repair financing, although you may face steep interest rates. Beware of interest-deferred, closed-loop cards that offer several months of a 0% APR. If you don’t repay the balance in full before the deferred period ends, you’ll owe back interest on the entire financed amount.

When your car stops working, time counts. Our review of five auto repair loans for bad credit can get you the money you need in as little as one business day. 

Don’t overlook your other alternatives for auto repair financing, including open- and closed-loop credit cards and special arrangements from nationwide and local repair shops. If your car needs expensive repairs, you may want to arrange a car loan and trade the heap in for another vehicle.