10 Auto Repair Loans for Bad Credit, Including No Credit Check Options

You can get an auto repair loan even if you have bad credit — and sometimes without a credit check. While the car dealership and your mechanic may offer their own finance options, you can always apply for a personal loan and use it to fix your car. Auto repair loans for bad credit are listed in this article. Our list of auto repair loan providers for people with bad credit includes: Avant, CashUSA.com, LendingClub, LendingPoint, Loans Now, NetCredit, OneMain Financial, Peerform, PersonalLoans, and Wells Fargo.

In This Article

Can You Get an Auto Repair Loan With Bad Credit?

You may have more limited options, but, yes, you can get an auto repair loan even if you have bad credit. Credit scores can range from 300 to 850. According to Experian, a score below 669 is considered “fair” or “poor” — meaning lenders will likely charge you higher interest rates and some lenders may choose to not work with you at all.

Some issues that could be affecting your credit score include your average account age, how often you’ve made late payments, whether you have any unpaid debt, what type of debt you’re carrying, any new applications for credit, and whether your credit lines are maxed out. Credit agencies use these factors to predict how well you’ll be able to repay a new loan.

Questions to Ask Before Taking Out an Auto Repair Loan

When your car is in the shop, you may feel pressed to make a decision to borrow first and ask questions later. But don’t let a quick decision make your financial situation worse in the long term. It’s important to understand the terms of any loan before committing. Before you take out an auto repair loan, consider the following questions:

  • Does the provider lend in my area?
  • Do I meet the credit requirements, or can I use a cosigner who does?
  • Can I borrow enough to cover my repair estimate?
  • What’s the interest rate?  What happens if I don’t pay the balance off during the loan period?
  • Will I be able to pay on time? What’s the penalty if I pay late?

In addition to thinking through the terms of a loan, you should also work with the dealership or mechanic on the cost estimate. When you get the estimate for the work your car needs, call around to see if other shops can give you a better price. Ask friends and family for recommendations of reliable mechanics they’ve used in the past. It never hurts to get a second opinion.

If you’re short on cash and you’re not in a hurry to repair your car, you can try calling technical or vocational schools that have mechanic training programs. Find out if a school could use your car as a class project. If so, ask if it charges a fee and what you can expect to pay for parts. You can find local listings for mechanic schools at Trade-Schools.net.

Where Can You Get an Auto Repair Loan for Bad Credit? No Credit Check?

Many dealerships offer financing to help you pay for repair costs, including Buick, Chevrolet, Chrysler, Dodge, Honda, Jeep, Nissan, Toyota, and others. Contact your local dealership to see if it has in-house financing or if it works with a lending partner like Confident Financial Solutions, iCare Financial, or Synchrony Financial. These lenders will require a credit check, but they may have more flexible requirements or better terms than taking a loan directly.

You can also ask your mechanic if he or she may be willing to agree to a payment plan, even if the shop doesn’t officially offer one. Meanwhile, some mechanics offer bad-credit auto repair financing through a lease-purchase program like West Creek Financial. Lease-purchase finance companies work through the retailer, so the financing options will depend on your mechanic’s program. Lease-purchase payment plans don’t require a credit check, but there are some important downsides to lease-purchase plans — primarily cost. Instead of paying interest on a loan, you’ll pay a portion of the lease fee with each payment. Those fees can increase your repair costs by 200% or more. Another drawback is that you won’t actually own your car until the lease is paid in full.

Another option is a personal loan. Any personal loan can be used to pay for car repairs. Some companies advertise “auto repair loans,” but you’ll be borrowing from the same companies on the same terms, no matter what you use the money for. We’ve broken the list of lenders down by secured loans providers and unsecured loan providers.

Secured Loan Providers

You can avoid a credit check or make up for a low credit score by offering collateral. If you have valuable assets like a paid-off car, motorcycle, or boat, or a savings account or certificate of deposit, you can borrow against the value. Keep in mind, a secured loan is only “secure” for the lender; you risk losing your collateral if you fail to pay the loan back on time.

The best place to check for a secured loan is with a federal credit union. The National Credit Union Administration’s credit union locator will show options near you, but you’ll need to visit an individual credit union’s website to see if you qualify. When you find one, contact the nearest branch to see if it offers secured loans.

The following lenders offer secured loans on different types of collateral:

1. OneMain Financial

  • Coverage area: Nationwide; rates and terms vary state by state
  • Loan amount and terms: OneMain Financial offers both unsecured and secured loans. Your specific loan offer, including the loan amount and interest rate, depends on the value of your collateral and your financial situation.
  • Minimum credit score: No stated minimum
  • Credit check required? When you apply, OneMain Financial will run a “soft” credit check, which won’t affect your credit score.
  • Source: OneMain Financial FAQ

2. Wells Fargo

  • Coverage area: Nationwide; rates and terms vary state by state
  • Loan amount and terms: You can use a Wells Fargo savings account or CD as collateral for a one-time loan, a line of credit, or a secured credit card. The loan must be smaller than the value of your collateral account.
    • Secured loan: Minimum loan is $3,000; maximum loan is $250,000. Rates run from 5.50% to 13.79%.
    • Secured line of credit: Minimum line of credit is $5,000; maximum line of credit is $250,000. Rates run from 6.50 to 10%.
    • Secured credit card: Minimum credit line is $300; maximum credit line is $10,000. Rates start at 20.74%.
  • Minimum credit score: No stated minimum
  • Credit check required? Yes
  • Source: Wells Fargo Types of Secured Loans and Lines of Credit

Note: In some states, you can use your car title to secure a loan. Title loans are typically 25 to 50% of the car’s value and may charge triple-digit interest. The Consumer Financial Protection Bureau warns against title loans as “abusive” and a “debt trap.” And the Federal Trade Commission advises consumers to take almost any other alternative before considering a title loan.

Unsecured Loan Providers

These lenders will work with you even if you have a low credit score or past financial problems.

3. Avant

Avant is a direct lender providing personal loans.

  • Coverage area: Nationwide; terms vary by state
  • Loan amount and terms: Loan amounts range from $2,000 to $35,000, with payment plans from two to five years. Interest rates range from 9.95 to 35.99%.
  • Minimum credit score: No stated minimum, but your credit history affects the terms you’ll be offered. Typical customers have scores of 600 and up.
  • Credit check required? When you apply, Avant will run a “soft” credit check, which won’t affect your credit score.
  • Source: Avant Emergency Loans

4. CashUSA.com

CashUSA.com is not a direct lender. It is a brokerage site that will submit your application to many lenders in its network so you can choose your best option from the results.

  • Coverage area: Nationwide
  • Loan amount and terms: Loan amounts range from $1,000 to $10,000, with payment plans from 90 days to six years. Interest rates vary based on lender, location, and the details of your profile. Typical rates are between 5.99 and 35.99%.
  • Minimum credit score: No minimum. You must be 18 years old, be employed with a net income of $1,000 per month, have a checking account in your own name, and be a U.S. citizen or permanent resident. Your credit history affects the terms you’ll be offered.
  • Credit check required? When you apply, CashUSA.com will run a “soft” credit check, which won’t affect your credit score. Individual lenders may run other types of credit checks that could show up as inquiries on your credit report.
  • Source: CashUSA.com

5. LendingClub

LendingClub is a peer-to-peer lending network that connects borrowers with private investors (instead of financial companies).

  • Coverage area: Nationwide except Iowa, Guam, and Puerto Rico
  • Loan amount and terms: Loan amounts range from $1,000 to $40,000. Interest rates vary based on lender, location, and your profile. Loans may be variable or fixed.
  • Minimum credit score: No minimum. You must be 18 years old, have a bank account in your own name, and be a U.S. citizen, permanent resident, or residing in the U.S. on a long-term visa. Your credit history affects the terms you’ll be offered. If you don’t get an offer, you can re-apply with a cosigner.
  • Credit check required? When you apply, LendingClub will run a “soft” credit check, which won’t affect your credit score.
  • Source: LendingClub.com

6. LendingPoint

LendingPoint is a direct lender offering personal loans.

  • Coverage area: Currently available in 34 states and Washington, D.C.
  • Loan amount and terms: Loan amounts range from $2,000 to $25,000, with terms from two to four years. Interest rates range from 15.49 to 34.99%.
  • Minimum credit score: No stated minimum. Offers are made based on your overall “story,” which includes your job history, current income, and long-term financial picture. You must be 18 years old with a government-issued ID and a Social Security number, have a bank account in your own name, and have an annual income of $20,000. Your credit history affects the terms you’ll be offered.
  • Credit check required? When you apply, LendingPoint will run a “soft” credit check, which won’t affect your credit score. If you accept a loan offer, LendingPoint will make a “hard” inquiry that will show up on your credit report.
  • Source: LendingPoint FAQ

7. Loans Now

Loans Now is a direct lender offering personal loans.

  • Coverage area: Nationwide
  • Loan amount and terms: Loan amounts are customizable, with payment plans from three to seven years. Interest rates start at 4.99% and vary according to your location and financial profile.
  • Minimum credit score: Can be as low as 450 with the personal “loan discovery process.”
  • Credit check required? No upfront credit check, but, if you accept an offer, Loans Now will do a “hard” inquiry, which will show up on your credit report.
  • Source: Loans Now How It Works

8. NetCredit

NetCredit is a direct lender offering personal loans.

  • Coverage area: Available in 14 states; terms vary by state
  • Loan amount and terms: Loan amounts range from $1,000 to $10,000. Interest rates are as high as 155% in some states.
  • Minimum credit score: No stated minimum, but your credit history affects the terms you’ll be offered.
  • Credit check required? When you apply, NetCredit will run a “soft” credit check, which won’t affect your credit score.
  • Source: NetCredit FAQ

9. Peerform

Peerform is a peer-to-peer lending network that connects borrowers with private investors (instead of financial companies).

10. PersonalLoans.com

PersonalLoans is a clearinghouse that can connect you to banks, finance companies, and peer-to-peer networks that will make you a loan offer based on your profile.

  • Coverage area: Nationwide; terms vary by state
  • Loan amount and terms: Loan amounts range from $1,000 to $35,000. Interest rates vary based on the lender.
  • Minimum credit score: No minimum. You must be 18 years old, have a Social Security number and bank account in your own name, and be a U.S. citizen or permanent resident. You must be employed or have regular income from another source, such as Social Security or a pension. Your credit history affects the terms you’ll be offered.
  • Credit check required? Lenders reviewing your application may do either a “soft” or “hard” credit check.
  • Source: PersonalLoans FAQ

In Summary

Credit issues don’t have to stop you from making the car repairs you need. We researched six different ways you can look into to pay for expensive auto repairs: a mechanic training program, financing through a dealership, a payment plan between you and the mechanic, a lease-purchase plan, a secured loan, or an unsecured loan. We also provided the list of loan providers willing to work with bad credit. You can get secured or unsecured auto repair loans for bad credit from Avant, CashUSA.com, LendingClub, LendingPoint, Loans Now, NetCredit, OneMain Financial, Peerform, PersonalLoans, and Wells Fargo.

Some lenders have specific loans for military service members. For more information on personal loans for active-duty personnel or veterans with bad credit, check out our article: Loans for Veterans with Bad Credit. You may also want to read our article listing auto repair credit cards available — even if you have bad credit.

Did the mechanic fix your car without permission? Find out if you actually have to pay in this article.

Similar Articles

Leave a Comment

Terms of Use