Auto Repair Loans: How to Finance Car Repairs

NerdWallet’s picks for the best auto repair loans

When comparing loans, consider rates and loan amounts as well as funding time. You'll also want to make sure the monthly payments fit in your budget.

Happen Bank: Best for joint auto repair loans

Happen (formerly LendingClub) offers a joint personal loan, meaning you can add another person to your application to help you qualify. This flexibility comes in handy if the family vehicle needs a repair, and two people are willing to put their names on the loan application.

One thing to keep in mind, though: Happen charges an origination fee up to 8%.

Patelco Credit Union: Best for small auto repair loans

If your auto repair bill is less than $1,000, Patelco could be a fitting option. It offers personal loans as low as $300, while most lenders have minimum loan amounts starting in the thousands.

To get a Patelco loan, you do have to become a member of the credit union. But unlike some credit unions, anyone is eligible to join.

Best Egg: Best for secured auto repair loans

Personal loans are typically unsecured, meaning they don’t require collateral, but some lenders offer a secured-loan option. Best Egg offers lower rates when you secure its loan with household fixtures, such as built-in cabinets or bathroom vanities.

One downside is that Best Egg’s minimum loan amount starts at $2,000, so this lender may not be the best fit if you don’t need to borrow that much for your car repair.

Upstart: Best auto repair loan if you have thin credit

While many personal loan lenders require you to have at least a couple years of credit history, Upstart accepts loan applicants who are new to credit or have thin credit histories. The lender also uses alternative data points, like college education or employment history, to evaluate loan applicants.

Note that an Upstart personal loan could come with an origination fee up to 12%, which is higher than many lenders.

Prosper: Best auto repair loan if you have bad credit

Prosper personal loans have one of the lowest credit score requirements of any lender we reviewed (560), so it’s a good option if you have bad credit. It also doesn’t have a strict income requirement, as long as you can show proof of some income.

Prosper charges an origination fee up to 9.99%.

Universal Credit: Best auto repair loan with rate discount

You want the most affordable loan possible, and Universal Credit makes that easier by offering an easy-to-get rate discount — 0.50 percentage points, simply for setting up automatic monthly payments on your loan.

Similar to other lenders on this list, Universal Credit charges an origination fee up to 9.99%.

How we chose the best personal loans

Our team of consumer lending experts follows an objective and robust methodology to rate lenders and pick the best.

30+

Lenders reviewed

We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.

25+

Categories assessed

Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.

60+

Data points analyzed

Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.

Star rating categories

We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.

Affordability

25%

We review lenders’ annual percentage rate offerings and the competitiveness of each lenders’ APR range. We also assess whether a lender charges an origination fee and any opportunity for borrowers to receive a rate discount.

Customer experience

20%

We consider the experience of the consumer trying to manage a personal loan, which means accessibility of customer service representatives, whether borrowers can choose and change their payment due date, and the ability to track their loan on a mobile app.

Underwriting and eligibility

20%

We consider the rigorousness of each lender’s underwriting practices and how widely available their loans are. This category includes whether a lender does a hard credit check before providing a loan, the range of credit profiles they accept and how many states their loans are offered in.

Loan flexibility

20%

We assess how flexible lenders can be with borrowers, including whether they offer multiple loan types, personal loan amounts and repayment term options and whether they offer direct payment to creditors on debt consolidation loans.

Application process

15%

We consider the lender’s full application process, including a borrower’s ability to preview their loan offer via pre-qualification, whether basic loan information such as APR range and repayment terms are available and easy to find online and how quickly a loan can be funded after approval.

5.0

Overall score

NerdWallet’s review process evaluates and rates personal loan products from more than 30 financial technology companies and financial institutions. We collect over 60 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

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How long does it take to get an auto repair loan?

You can get a personal loan for an auto repair from a bank, credit union or online lender, but online lenders tend to be the fastest.

The online lenders featured above all offer instant approval and can fund the loan within one day. Patelco Credit Union has the longest timeline. Though it offers instant approval, it takes two to three days to fund a loan.

To speed up the process with any lender, make sure you supply all required documentation in your loan application, including proof of employment and income, like a paystub or tax return.

» MORE: How long does it take to get a personal loan?

How to get an auto repair loan

Follow these steps to get a loan to cover auto repair costs.

1. Determine how much you’ll need to borrow

You’ll need a solid cost estimate to know what size loan to ask for. Get multiple quotes to find the best deal, but keep in mind that some mechanics charge a diagnostic fee to determine the scope of the work. General diagnosis costs range between $122 and $179, according to online automotive platform, RepairPal ^[1].

Also consider factors like the time it’ll take to complete the repairs, the reputation of the repair shop and the distance if you need to tow the vehicle to a shop.

» MORE: What are the average costs of owning a car?

2. Calculate your monthly loan payments

Once you determine what you need to borrow, use a personal loan calculator to estimate what your monthly payments could be.

Rates on personal loans range from about 6% to 36%, and terms are typically two to seven years. Plug in different rates and terms to see how they affect the monthly payment and total loan cost.

3. Pre-qualify with multiple lenders

Before applying, pre-qualify for personal loans to preview the rate, monthly payment amount and loan term. This process is free and typically involves a soft credit pull, which doesn’t affect your credit score.

Pre-qualify with multiple lenders to compare loan offers. Also compare other financing options to determine the best deal.

4. Complete a formal loan application

Gather documents like your driver’s license, pay stubs and tax returns, because many lenders require proof of identification and income on a loan application. The lender will conduct a hard credit inquiry when you apply for a personal loan, causing a small dip in your credit score.

» MORE: How to get a personal loan

5. Sign loan documents and get funded

Once you’re approved for the loan and sign the paperwork, the lender will likely disburse funds within a few days. Your first loan payment will be due in about 30 days, and the monthly payment amount will be the same for the loan term.

Consider enrolling in automatic payments or setting calendar reminders to ensure you make payments on time. Missed payments can result in late fees, and most lenders report payments that are more than 30 days late to the credit bureaus. Late payments can cause your credit score to drop significantly.

» MORE: What happens if you default on a personal loan?

Alternative financing options

Repair shop financing

The dealership or repair shop may offer in-house financing through a third-party lender. For example, Jiffy Lube and Midas both offer credit cards.

These financing options may include a low- or no-interest introductory period, but be sure to check the regular interest rate and terms. If you can’t pay the repair off during the promotional period, you may be charged interest retroactively.

Buy now, pay later

“Buy now, pay later” companies, such as Affirm, Afterpay and Klarna, offer payment plans that can help break up an auto repair or car-related purchase, like new tires. These plans may be available at the repair shop or dealer.

The most popular plan is called a pay-in-four, in which payments are spread out across six weeks for no interest. Longer plans up to five years are also available, but usually charge interest.

0% APR credit card

Some credit cards have no-interest promotional periods — generally the first 15 or 21 months — for new account holders. Qualifying for a 0% APR credit card usually requires good or excellent credit.

These cards generally don’t charge retroactive interest, so if you don’t pay the card off during the promotional period, you’ll begin paying the regular interest rate once it ends.

Family loan

Borrowing money from a loved one helps you avoid a formal application process and may be an interest-free financing option. Sign a loan agreement to keep both parties on the same page about how the family loan will be repaid.

Financial assistance from a local nonprofit

Some local charities and nonprofit organizations help people in need with bills they can’t afford, including car repair bills. Assistance may be based on your household income. A good place to start is 211.org.

Avoid predatory car repair loans

Payday loans and title loans may provide you with money quickly, but these lenders often charge triple-digit rates. Also, the loans’ short repayment periods make them difficult to repay.

Most personal finance experts consider loans to be affordable if interest rates are 36% or lower.