Vehicle repairs can be pricey to start with, but their cost increased significantly over the past year, rising 7.2% from May 2023 to May 2024-more than twice the rate of inflation-according to the Consumer Price Index. If rising costs have made it hard to pay for essential repairs or maintenance, an auto repair loan can be a better choice than turning to a credit card.
Make sure the car repair isn’t something covered by your insurance or car warranty; if not, a loan may be your best move.
But before applying for one, learn how they work, how much they cost, where to find them and consider alternatives.
The best auto repair loans tend to be personal loans since they are typically available within days, do not require home equity to qualify, have lower average rates than credit cards and have fixed instead of variable rates.Best auto repair loans
Auto repair loans-essentially personal loans that are used for car repair costs-are not one-size-fits-all. The best auto repair loan depends on how much money you need, how soon you need it, how long you need to repay it (what monthly payment you can afford) and the interest rate you can qualify for. You should also consider each lender’s record of customer service, features and perks.
If you’ve already used a credit card to pay for auto repairs or maintenance, consider if you can qualify for a balance-transfer credit card at 0% and pay it off before the promotional period ends. Or, refinance the credit card with a personal loan at a lower interest rate.Best for repairs under $2,000
To avoid paying more than you need to for your auto repair loan, look for loans that give you only as much as you need to fix your vehicle.
These lenders have loans for auto repairs under $2,000, which may help you keep your monthly payments low or pay off your loan in a short period. LendingClub, Universal Credit, Upgrade and Upstart have personal loans as low as $1,000, and you can borrow as little as $1,500 from OneMain Financial.
Loan Amount
$1000 to $50000
Pros
Fair credit borrowers eligible
Autopay and direct pay discounts
Can fund in as little as 1 business day
Mobile app
Secured loans available
Cons
High maximum origination fee
Cosigners not accepted on home improvement loans
Low J.D. Power ranking
Overview
Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don’t need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Best debt consolidation loans for bad credit
Loan Amount
$1000 to $50000
Pros
Borrowers with bad credit considered
No minimum income requirement
Autopay and direct pay discounts available
Can fund in one business day
Cons
High APRs
Potentially high origination fees
Not available in Iowa
Overview
Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.
Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you’ve improved your credit score.
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
Loan Amount
$1000 to $40000
Pros
Mobile app
Low minimum income requirement
High close rate on loans made through Credible
Available in all states
Cons
Origination fee
No discounts
Funding not as fast as some competitors
Overview
LendingClub is a solid lender for good credit borrowers and some fair credit borrowers that apply directly on its website. It’s easy to prequalify with LendingClub, especially if you’re uncomfortable providing your Social Security number, as the company doesn’t require it at the prequalification stage. (You will need to provide it if you move forward with a full application.)
While prequalification is not a guarantee that you’ll be approved for a loan, LendingClub does a better job than most other Credible partner lenders at approving applicants that have successfully prequalified. In other words, you’re less likely to have your application declined once you apply (if you’ve already prequalified). LendingClub may charge an origination fee between 3% and 8%.
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
Best fast personal loans for all credit types
Loan Amount
$1000 to $50000
Pros
May fund in 1 business day
No minimum credit score requirement on lender site
Low minimum APR
Trustpilot score of 4.9/5 stars
Cons
May charge a high origination fee
No discounts offered
Overview
Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it’s also is one of few lenders that doesn’t have a minimum credit score requirement (if you apply on the lender’s website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Best for short-term loans and same day funding
Loan Amount
$1000 to $35000
Pros
Funding as soon as the same day
Low minimum income required
100% digital process
Cons
No discounts
Maximum loan amount is lower than most other lenders
Origination fee
Not available in CO, CT, IN, KS, LA, ME, ND, NE, NH, NJ, NV, OK, OR, PA, RI, SC, SD, VT, WV, WI, or WY
Overview
Zable offers relatively small loan amounts — ranging from $1,000 to $35,000 — that can be deposited in your account as soon as the same day you are approved, if it is by the lender’s deadline. It’s an option for fair-credit borrowers, with a minimum credit score of 600, as well as those with lower incomes.
Its origination fees range from 5% to 9%, however, and it does not offer discounts, secured loans, nor the option to add a cosigner to your application. Zable also currently does not offer loans in 21 states.
Fees
Origination fees (5% to 9%)
Eligibility
Not available in CO, CT, IN, KS, LA, ME, ND, NE, NH, NJ, NV, OK, OR, PA, RI, SC, SD, VT, WV, WI, or WY
Loan uses
Debt consolidation, credit card refinancing, home improvement, major purchase, car financing
Also consider these credit unions for $1,000 loans and smaller:PenFed Credit UnionUSAAFirst Tech Federal Credit Union
Best for low rates
The average personal loan rate is much lower than the average credit card rate, according to Federal Reserve data-at 12.49% APR and 21.59% APR, respectively. That’s important because a higher annual percentage rate (APR) means a more expensive loan. You’ll be eligible for the lowest interest rates if you have excellent credit and a strong income. But there can still be wide variation between lenders, so it’s always a good idea to prequalify with several and compare.
Usually, the longer your loan term, the higher your interest rate.
The following lenders have low starting rates for auto repair financing, although they may require excellent credit to qualify for the best rates.
Loan Amount
$5000 to $100000
Min. Credit Score
Does not disclose
Pros
No fees required
Large loan amounts available
Autopay and direct pay discounts
Same day funding
Long loan terms available
Cons
Good credit required
5,000 minimum loan amount
Overview
SoFi stands out for offering no-fee personal loans with competitive rates, high loan amounts, long loan terms, discounts for autopay and direct pay, and funding as soon as the same day. Plus, SoFi prioritizes convenience for existing and potential customers with features like live chat and an easy prequalification process that doesn’t require your Social Security number.
The main catch is that you need to qualify for a loan with SoFi, which can be hard to do if you don’t have good credit. You also won’t be able to apply with a cosigner, since SoFi doesn’t accept cosigners; nor does it offer secured personal loans.
Fees
Option to pay an origination fee in exchange for a lower rate
Eligibility
Available in all states
Time to get funds
Typically within a few days, given approval and bank account verification, but sometimes within the same day
Loan uses
Solely for personal, family, or household uses
Loan Amount
$1000 to $50000
Pros
Fair credit borrowers eligible
Autopay and direct pay discounts
Can fund in as little as 1 business day
Mobile app
Secured loans available
Cons
High maximum origination fee
Cosigners not accepted on home improvement loans
Low J.D. Power ranking
Overview
Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don’t need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Best for no origination fees (and low rates)
Loan Amount
$2500 to $40000
Pros
Low minimum APR
May fund the next business day
Long loan terms available
Direct pay to creditors
No origination fee
Cons
No discounts offered
Secured loans not available
Overview
Discover Personal Loans offers low APRs, repayment terms up to seven years, no origination fees, nationwide availability, and doesn’t require your Social Security number to prequalify on its site. You’ll need to have an annual income of at least $40,000, and a FICO score 660 or higher, to be eligible. If your credit score is fair or poor, you’ll need to go elsewhere, as Discover doesn’t allow cosigners.
Funds are available as soon as the next business day after loan approval.
Eligibility
Available in all 50 states
Time to get funds
Funds can be sent as soon as the next business day after acceptance
Loan uses
Auto repair, credit card refinancing, debt consolidation, home remodel or repair, major purchase, medical expenses, taxes, vacation, and wedding
Best home improvement loans and low rates
Loan Amount
$5000 to $100000
Pros
Same-day funding available
High maximum loan amount
No origination fee
Cons
Good credit required
No prequalification process
Not available in Vermont
Overview
Lightstream is one of three Credible partner lenders to offer loan amounts up to $100,000, which makes it ideal for financing large expenses like home improvements or weddings. Funds are available as soon as the same day you apply, and you’ll have up to 12 years to repay certain types of loans, including home improvement loans, RV loans, and boat loans. There are no origination fees, and rates are low — Lightstream’s lowest APR beats SoFi’s advertised lowest APR by 1 percentage point. But you’ll need good credit to qualify.
Unlike most lenders, Lightstream does not let you prequalify on its site. Nor does it provide a contact phone number next to its customer service hours on its website.
Repayment terms
2 – 12 years, depending on loan purpose
Eligibility
Available in all states except RI and VT
Time to get funds
As soon as the next business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Best for high close rates if pre-approved
Loan Amount
$2000 to $50000
Pros
Secured loans available
Low minimum income requirement
Scored second in J.D. Power’s Consumer Lending Satisfaction Study
Funds in 1-3 business days
High close rate on loans through Credible platform
Cons
Origination fees
No discounts
Not available in DC, IA, VT, or WV
Overview
Best Egg is a solid lender for a wide range of borrowers and, notably, scored second for personal loan satisfaction in J.D. Power’s Consumer Lending Study. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You’ll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 9.99% with Best Egg.
Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners).
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
Time to get funds
As soon as 1 to 3 business days after successful verification
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Best fast personal loans for all credit types
Loan Amount
$1000 to $50000
Pros
May fund in 1 business day
No minimum credit score requirement on lender site
Low minimum APR
Trustpilot score of 4.9/5 stars
Cons
May charge a high origination fee
No discounts offered
Overview
Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it’s also is one of few lenders that doesn’t have a minimum credit score requirement (if you apply on the lender’s website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Best for short-term loans and same day funding
Loan Amount
$1000 to $35000
Pros
Funding as soon as the same day
Low minimum income required
100% digital process
Cons
No discounts
Maximum loan amount is lower than most other lenders
Origination fee
Not available in CO, CT, IN, KS, LA, ME, ND, NE, NH, NJ, NV, OK, OR, PA, RI, SC, SD, VT, WV, WI, or WY
Overview
Zable offers relatively small loan amounts — ranging from $1,000 to $35,000 — that can be deposited in your account as soon as the same day you are approved, if it is by the lender’s deadline. It’s an option for fair-credit borrowers, with a minimum credit score of 600, as well as those with lower incomes.
Its origination fees range from 5% to 9%, however, and it does not offer discounts, secured loans, nor the option to add a cosigner to your application. Zable also currently does not offer loans in 21 states.
Fees
Origination fees (5% to 9%)
Eligibility
Not available in CO, CT, IN, KS, LA, ME, ND, NE, NH, NJ, NV, OK, OR, PA, RI, SC, SD, VT, WV, WI, or WY
Loan uses
Debt consolidation, credit card refinancing, home improvement, major purchase, car financingBest for bad credit
Some lenders may approve your loan if you have bad credit (a FICO score below 580) or fair credit (a FICO score between 580 and 669). But expect to pay a higher interest rate and fees, such as an origination fee.
To make sure you qualify, compare each lender’s minimum credit score requirement. For example, Upstart requires a credit score of at least 300, although you may also qualify if you have no credit history. Meanwhile, you’ll need a credit score of at least 580 to get a personal loan for auto repair from Avant. However, OneMain Financial has no minimum credit score requirement.
Loan Amount
$1000 to $50000
Pros
Fair credit borrowers eligible
Autopay and direct pay discounts
Can fund in as little as 1 business day
Mobile app
Secured loans available
Cons
High maximum origination fee
Cosigners not accepted on home improvement loans
Low J.D. Power ranking
Overview
Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don’t need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Best debt consolidation loans for bad credit
Loan Amount
$1000 to $50000
Pros
Borrowers with bad credit considered
No minimum income requirement
Autopay and direct pay discounts available
Can fund in one business day
Cons
High APRs
Potentially high origination fees
Not available in Iowa
Overview
Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.
Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you’ve improved your credit score.
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
Best for all credit types
Loan Amount
$2000 to $35000
Pros
Borrowers with bad credit considered
Funds as soon as the next business day
2-year loan terms available
Cons
No discounts offered
Origination fee
Not available in HI, IA, MA, ME, NY, VT, or WV
Overview
Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who’ve prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, and WV
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Best bad credit personal loans
Loan Amount
$1500 to $20000
Pros
Flexible eligibility requirements
Offers secured options
Competitive bad-credit loans
Physical presence
Cons
Availability
Origination fees
High starting APR
Overview
OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can’t, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.
Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn’t a given.
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Best fast personal loans for all credit types
Loan Amount
$1000 to $50000
Pros
May fund in 1 business day
No minimum credit score requirement on lender site
Low minimum APR
Trustpilot score of 4.9/5 stars
Cons
May charge a high origination fee
No discounts offered
Overview
Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it’s also is one of few lenders that doesn’t have a minimum credit score requirement (if you apply on the lender’s website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
If you have bad credit and belong to a credit union, see if it offers payday alternative loans (PALs). These are short-term loans up to $2,000 with rates capped at 28% and repayment terms up to one year.Best credit unions
Some of the best auto repair loans are available through credit unions. Credit unions usually require you to become a member to get a loan, but membership can come with perks, like lower-than-average interest rates and exclusive discounts for financial products and services, like car insurance or renters insurance.PenFed
PenFed shines with no origination fees, loans as low as $600, low interest rates that start at 8.99%, and repayment terms up to five years. You’ll need to become a member to receive a loan, but membership is open to everyone. PenFed doesn’t have a minimum income amount, and offers live chat and an entirely online loan application process.USAA
USAA offers members loan amounts as low as $1,000 for terms up to 84 months, and rates as low as 10.34% that top out at 18.51%. You’ll need to be an active or retired military member or an eligible family member to qualify. The company doesn’t charge origination fees, doesn’t specify a minimum credit score and doesn’t allow cosigners.First Tech Federal Credit Union
First Tech offers loans as low as $500, which can be ideal for small repairs. These small loans come with terms of up to 36 months, allowing you to take the time you need to pay off your loan. Larger loans have longer available terms (up to 84 months), and higher starting APRs. Loans come with no origination fees, and you can defer your first payment for up to 45 days.
You’ll need to be a member to qualify, but membership is open to over 900 partner companies and members of the Computer History Museum and Financial Fitness Association.Methodology
The best auto loans were evaluated according to different credit profiles and needs, based on a range of criteria that includes: customer experience and customer service options, minimum and maximum fixed rates, minimum and maximum loan amounts, funding times, repayment terms, fees, discounts, loan uses, minimum credit score and income requirements and other factors.
We gathered information from each lender’s website and customer service team, from our partners and from third-parties including the Better Business Bureau and Trustpilot, a source of user-generated reviews of online businesses. Each data point was verified by a third party to confirm accuracy.What is an auto repair loan?
In contrast to an auto loan, which covers the cost of a new or used vehicle, an auto repair loan helps you pay for vehicle repairs. An auto repair loan can have a wide range of interest rates based on your credit history, the amount borrowed, your loan term and the type of loan you use, such as a personal loan or a credit card.Personal loans typically have fixed interest rates and fixed monthly payments. You receive a lump sum upfront that you then use to pay for car repairs. That amount is paid back over a period of years. Terms typically range between two and seven years; loan amounts typically range from under $1,000 to over $50,000, depending on the lender and what you can qualify for. Interest rates vary based on your credit, but range from around 7% APR to 36% APR.Credit cards have a revolving credit line that you can borrow from, repay and borrow from again. Rates tend to be much higher than personal loans, on average, and interest compounds daily. In other words, if you keep a balance on your card, you could owe interest on any unpaid interest that has accrued. For this reason, credit cards are best for payments you can pay off within the card’s grace period (usually one billing cycle), or if you qualify for a 0% APR credit card.
Auto repair loans can be used for minor fixes, like a windshield replacement, or for more expensive repairs, like an alternator replacement.Where can I get auto repair financing?
Personal loans and credit cards are some of the quickest ways to finance auto repairs since the money can be available immediately (credit cards), the same day (some personal loan lenders) or within days of your application (most personal loans).
You can find a personal loan with an online lender, bank or credit union. Most lenders let you prequalify before applying, which is a way to compare rate estimates between lenders, based on a snapshot of your credit and financial information. Prequalification won’t hurt your credit, but is not an offer of credit. Once you apply, most lenders conduct a hard credit pull, which can cause your score to temporarily drop, usually by no more than a few points.
With an online lender, you can compare loan options, complete prequalification and apply for a loan through its website. If you prefer applying for a loan in person, a bank or credit union could be a better choice, although they sometimes have stricter credit and income requirements for borrowers.
Consider applying with a bank or credit union you already have an account with. Your bank may offer exclusive interest rates or loan terms and a simpler application process for current customers.How much does an auto repair loan cost?
How much you pay for a car repair loan depends on the cost of the repairs plus your loan’s terms, like your interest rate and length of the loan. Generally, if you have a shorter loan term, like two years, you may have a lower interest rate and pay less interest than you would if you extend your payments over three or four years. The average vehicle repair costs less than $2,000.
The table below illustrates what someone with very good credit might expect to pay for an auto repair loan with a repayment term of two years.Personal loan
Loan amount
Interest rate
Monthly payment
Total interest
$500
7.99%
$23
$43
$800
8.99%
$37
$77
$1,000
9.99%
$46
$107
$2,000
10.99%
$93
$237
$5,000
11.99%
$235
$648Credit card
For auto repairs paid with a credit card, we considered the average credit card APR for the same auto repair amounts paid off in two years. Note that credit card APRs can exceed 30% in some cases. At the other end of the spectrum, if you can qualify for a 0% APR card and pay it off within the promotional period, that could be the most cost-effective choice.
Loan amount
Interest rate
Monthly payment
Total interest
$500
21.59%
$26
$120
$800
21.59%
$41
$192
$1,000
21.59%
$52
$240
$2,000
21.59%
$103
$480
$5,000
21.59%
$258
$1,201How to compare auto repair loans
Take time to research and compare your options to find the best auto repair loan for your budget. Here’s what to consider:Know how much you need: Get an estimate of your repair costs directly from your mechanic so you’ll know how much you need to borrow. It could be helpful to pad the estimate with extra money to account for unexpected charges. Then, determine if you can put any money of your own toward repairs or if you need to borrow the full amount.Check your credit score: If you know your score, you can check lender credit score requirements prior to applying to make sure you’ll qualify. Your bank or credit card company may let you check your credit score for free through your online account, or use Experian to check your FICO score for free.Prequalify for accurate comparisons: Prequalification lets you review estimates of loan amounts, terms and APRs-which expresses a loan’s interest rate and upfront fees-with different lenders. It doesn’t hurt your credit, nor does it promise you a loan. To get a loan offer, you’ll need to apply, which may temporarily lower your credit score by a few points.Check credit card offers: Do you qualify for a 0% APR credit card? If so, can you pay it off within the promotional term? If not, you may be better off with a personal loan. Note what the APR adjusts to once the promotion expires, and use a credit card calculator to see what your payments would adjust to.Compare loan terms: Compare APRs and loan lengths from different lenders. Use a personal loan calculator to determine your estimated costs based on the information you gathered from prequalifying. For example, compare the total interest you might pay for a 1-year loan versus a 2-year loan, or note the potential differences in your monthly payments with a 15% APR versus an 11% APR.
Keep an eye on fees, like origination fees, which are deducted upfront from the loan amount and could increase how much you pay for your auto repair loan. Read all fine print before applying and signing for a loan.How to apply for an auto repair loan
After prequalifying for an auto repair loan, choose the most suitable loan term for your needs and apply for the loan or card through the lender or credit card company. Your lender should provide instructions to complete your application and may require the following:Identity verification, like your driver’s license or birth certificateProof of addressEmployment verification, like pay stubs or a letter from your employerCosigner information, if applicable
Review the loan’s or card’s terms if you qualify. If you want to move forward, sign the documents and submit them to the lender. For personal loans, you should get your funds deposited into your bank account according to the lender’s payment schedule, which can sometimes be as soon as the same day. With a credit card, you’ll have to wait to receive a physical card, but may be able to use a virtual card immediately.Alternatives to an auto repair loan
Car repair loans can help you get your vehicle back on the road, but there are a few other options to consider if you need help paying for car repairs.Savings
Instead of paying off a loan with interest each month, you might pay with existing savings instead. Then, you would transfer what would be your monthly loan payment into your savings account until you recoup what you took out for car repairs.
Consider opening a high-yield savings account for future emergency funding. These accounts have above-average interest rates to help your saved cash grow quicker than it would in a traditional savings account.Home equity
Another option exclusive to homeowners is to borrow the money for auto repairs from your home equity via a home equity loan or Heloc (home equity line of credit). A home equity loan gives you a lump sum that you’ll pay back monthly, similar to a regular loan except your home’s equity backs the loan. With a Heloc, you’ll have an open line of credit that you can borrow against as needed.
Just note that you’ll need sufficient equity to qualify. Lenders typically require that you have more than 20% equity in your home to qualify for a home equity loan or line of credit. It can also take longer to receive the funds (compared to a personal loan or credit card), as these types of loans can take a month or more to close.Car insurance
Finally, remember that your car insurance may pay for repairs if they’re related to covered incidents, like a vehicle crash or hail damage. Depending on your coverage, your insurance company might pay for most or the full cost of repairs.
Avoid payday loans and title loans. They often come with very high fees and short repayment terms that equate to predatory APRs. Plus, you’d need to use your upcoming paycheck (payday loan) or vehicle (title loan) as collateral.FAQCan I get an auto repair loan with bad credit?
Yes, it can be possible to get auto repair financing with bad credit, depending on the lender you choose. Be aware that auto repair loans for bad credit-typically designed for credit scores below 580-often have high interest rates, which can increase how much you pay for the loan over its term.Can I get an auto repair loan with no credit check?
Generally, most lenders won’t provide auto repair financing without a credit check. While you can usually prequalify for a loan with only a soft credit pull, lenders will typically run a hard credit check when you officially apply so they can give you a final loan offer.What can an auto repair loan cover?
An auto repair loan can cover several vehicle repairs, including engine repairs, tire replacements, brake repairs, windshield repairs or repairing a damaged interior.How long does it take to get a car repair loan?
Some lenders fund auto repair loans the same day you apply, but every lender is different and banks process money transfers differently. In many cases, you can expect to receive your loan within two to three business days after accepting your offer.Is an auto repair loan a good idea?
An auto repair loan might be a good choice if you need help paying for repairs and want to finance the costs over a period of years. A credit card could also make sense for small repairs, especially if you plan to pay off the amount within a month or two or have access to a 0% APR offer.Meet the contributorAmy Boyington
Amy Boyington is a freelance writer specializing in education, personal finance, and financial literacy. Since launching her writing business in 2016, she has helped more than 100 clients build their digital content databases through blogs, informational guides, and copywriting. Her work has also been featured in publications like Forbes Advisor and Homeowner.
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AI Underwriting, DPA, POS, Insurance Tools, CFPB Townstone Case; Inflation Takeaways
AI Underwriting, DPA, POS, Insurance Tools, CFPB Townstone Case; Inflation Takeaways
Yes, I know that this is a mortgage commentary, but some things are way above that. (Warning: tissues may be required; what’s happened legislatively since?) Dr. Ruth, who was sent to a Swiss orphanage by her parents were killed during the holocaust, died, as has fitness guru Richard Simmons, actresses Shelley Duvall, and Shannen Doherty. None of this has anything to do with mortgages, other than we as lenders are constantly involved in the fabric of our client’s lives. It seems like, at least over the past couple of years, time has flown by. It’s been four years since we were all watching called “The Tiger King.” The pandemic is ancient history in terms of mortgage rates. Four years since the last summer Olympics were scheduled. World Financial Group announced that Olympic and X Games gold-medalist snowboarder Shaun White will headline the company’s Convention of Champions this week. Don’t confuse Shaun with Sage Kotsenburg and his Totally Dope Refi Mortgage…a classic short clip. (Today’s podcast is found here and is sponsored by Calque. Calque provides a binding backup offer on a borrower’s departing residence, which empowers lenders to provide a bridge-like experience with easier qualification and less risk. Today’s episode features an interview with PHH Correspondent Lending’s Taylor Adams on the current state of correspondent lending.
Lender and Broker Software, Services, and Products
Home insurance pricing and availability continue to challenge homebuyers and existing homeowners in 2024. Matic, a digital insurance platform built for the mortgage industry, helps your borrowers find the best price and policy options by offering quick access to a network of 40+ A-rated insurance carriers directly within the loan closing or servicing experience. Seamlessly integrating into your existing processes, Matic saves time and reduces administrative burdens for processors, automating tasks like insurance document delivery. Our platform also enhances the borrower experience and opens up a new revenue stream for your business, with each policy generating additional income. Learn how mortgage enterprises can deliver automated, personalized insurance offers to your borrowers by booking a demo today.
Sagent executive talks servicing tech ROI circa 2024, including AI! A unified platform with cloud-native architecture is the foundation for leveraging AI, specifically LLMs, in mortgage servicing. The promise of AI in servicing depends on single-source, real-time data across the entire performing and nonperforming lifecycle. Sagent’s Sales and Business Development Lead, David Doyle, recently unpacked this conversation with MortgagePoint, sharing relevant industry intel including their strategy to help servicers deliver an exceptional homeowner experience while driving a substantial reduction in cost per loan. Check out the full article here and then reach out to the Sagent team with your questions.
“A&D Mortgage announces the launch of the ADvantage Partner Loyalty Program, transforming the mortgage broker industry with unparalleled benefits and rewards. Key benefits include earning points for funded loans, personalized support, and exclusive networking opportunities. Approved partners can redeem points for appraisal credits, lock extensions, underwriting fee waivers, and more. Preferred partners will retain their status and benefits seamlessly. For more information, visit ADvantage Partner Loyalty Program or contact ADvantage@admortgage.com. You can also find out more at our introductory webinar Tuesday, July 16 at 1 PM EST. To register, click here.”
“Stand out with a top-ranked mortgage point of sale customized for your business. In today’s competitive mortgage marketplace, customizing workflows and borrower experience is crucial to differentiation. With the industry-first configurability of Maxwell Point of Sale, lenders can define workflows for any mortgage product, while configuring triggers and business rules to align the borrower experience to operational processes. Maxwell Point of Sale also features more than 60 third-party integrations, allowing lending teams to seamlessly connect with other vital pieces of their workflow, from credit and verifications to pricing and disclosures. It’s no wonder that Maxwell Point of Sale is the top ranked mortgage point of sale on Capterra with 4.8/5 stars. Want to learn more? Let us know and we’ll show you what Maxwell can do for you and your borrowers.”
California: Announcing homebuyer assistance up to $350,000 per household to help low- and moderate-income residents (homebuyers and renters) impacted by wildfires in California in 2018 and 2020. The NEW ReCoverCA Homebuyer Assistance Program, is now available from Golden State Finance Authority (GSFA), featuring down payment and closing cost assistance up to $350,000 in the form of a deferred second mortgage with a zero percent note rate, fully forgiven after 5 years of ownership and occupancy. Counties eligible for 2018 funds are: Butte, Lake, Los Angeles, and Shasta. Counties eligible for 2020 funds are: Butte, Fresno, Los Angeles, Napa, Santa Cruz, Shasta, Siskiyou, and Solano. Properties eligible for financing through the Program must be located outside of High or Very High Fire Hazard Severity Zones. Join us for a Lender Training on the ReCoverCA Homebuyer Assistance Program and start helping families recover and re-establish long-term housing. For more info visit www.gsfahome.org.
Rejection is humiliating. Whether in relationships, prospects, or applying for college, it is a lingering feeling that haunts you. It stays with you as you work towards achieving your goals. In many cases, it is the reason many become successful, to reconcile the feeling of desertion. Getting your loans rejected should feel similar. Mortgage Lenders experience a 50 percent reduction in rejected loans after implementing AI Underwriter™. If you are tired of rejection, click here to schedule a demo.
CFPB Fair Lending Court Victory
On July 11, a U.S. Court of Appeals for the Seventh Circuit reversed a district court’s decision and ruled that the Consumer Financial Protection Bureau has broad authority to discourage discrimination to combat redlining, delivering a major victory to the bureau in a contentious case, CFPB v. Townstone Financial. The court validated the CFPB’s claims that the Chicago-based nonbank mortgage company and its owner violated ECOA by engaging in discriminatory marketing.
For some background, CFPB initiated a redlining enforcement action against the company in 2020, alleging defendants discouraged African Americans from applying for mortgage loans from the company and redlined African American neighborhoods in Chicago. Last year, the U.S. District Court for the Northern District of Illinois dismissed the CFPB’s action. On appeal, the CFPB argued that its interpretation of ECOA is supported by the historical context of Regulation B and has not been contested by Congress.
The court stated that Regulation B’s rule against deterring prospective applicants aligns with both the text and the intent of the ECOA, reasoning that it “cannot constrain artificially the ECOA to a single provision” and rather, must review it as a whole.
Applying this standard, the court held that ECOA prohibits “not only outright discrimination against applicants for credit, but also the discouragement of prospective applicants for credit.” In remanding the case, the 7th Circuit left it to the district court to determine whether the defendants’ alleged conduct was prohibited discouragement under ECOA, in addition to whether defendants’ argument that their allegedly unlawful conduct is protected by the First Amendment’s guarantee of free speech.
Attorney Brian Levy had this to say about CFPB’s victory: “Townstone is a critical case to follow for fair lending jurisprudence. If the 7th Circuit had agreed with the lower court that “prospective” applicants were not covered by ECOA, CFPB’s redlining theories would have been dramatically curtailed (leaving that mostly to the Justice Department). Yet, while many in the industry may have hoped that a Townstone victory would effectively prevent the CFPB from being able to pursue redlining claims, most people would agree that there is something wrong and discriminatory for a lender to be able hang a sign on the door that says something like “Irish need not apply”. I suspect the three-judge panel at the 7th Circuit were discomforted by the idea that Congress, in enacting ECOA, would not have permitted the CFPB to prevent that kind of blatant example of discouraging prospective loan applicants as opposed to merely protecting those who already had applied.
Discomfort also is caused by CFPB’s expansive position in redlining cases that pretty much everyone is a prospective applicant under ECOA and the failure to encourage applications is discouraging applications. But, that expansive interpretation of who is a prospective applicant for Townstone, as well as CFPB’s dubious definition of “discourage” haven’t ever been tested in court. Those issues have been sent back to the trial court (along with first amendment speech issues). Rather than starting over at the lower court, Townstone and its attorneys may still decide to appeal this 7th Circuit decision to the Supreme Court on whether ECOA encompasses prospective applicants at all. Stay tuned.”
Capital Markets
Last week, those hoping for imminent Fed rate cuts finally got the headline CPI they were waiting for when it was revealed that consumer prices fell in June by 0.1 percent. Excluding food and energy, prices rose by a mere 0.1 percent. Over the last three months, inflation has increased at an annualized pace of 2.1 percent. June’s report finally saw an easing in shelter inflation along with falling prices in discretionary spending.
U.S. consumers are feeling the fatigue of higher prices and beginning to reign in debt-fueled spending. The University of Michigan’s Consumer Sentiment report fell to an eight-month low as respondents were less optimistic of both current conditions and future expectations. The silver lining is that inflation expectations dipped slightly. Should a slowdown in spending gain momentum, focus will shift towards labor market impacts and a potential economic downturn.
Inflation at the wholesale level rose 0.2 percent month-over-month and 2.6 percent year-over-year, above expectations while May’s figures saw an upward revision. The year-over-year rate for PPI and core PPI accelerated for the fifth month out of the last six with rising prices of services outweighing falling prices of goods in June. The jump was almost exclusively related to retailer margins. The bond market didn’t react much to the PPI number, with fed funds futures still nearly certain there will be a rate cut in September.
This week’s calendar includes more Treasury supply, besides bills, with $13 billion reopened 20-year bonds and $19 billion new 10-TIPS on Wednesday and Thursday, respectively. There is also some first-tier data including retail sales, Fed surveys, business inventories and housing-related reports. At least one Fed speaker is scheduled for each day before going into their blackout the following week. The latest Beige Book will also be released on Wednesday ahead of the July 31 announcement. Outside of the Fed, the ECB will be out with their latest monetary policy decision where they are expected to hold rates steady following the 25bp cut at the prior meeting.
Bank earnings continue with Goldman Sachs reporting today, and Bank of America and Morgan Stanley tomorrow along with several super regional banks. Regarding MBS, Class B 48-hours is on Tuesday and Class C on Thursday.
Today’s economic calendar is light and includes Empire manufacturing for July, and remarks from Fed Chair Powell and San Francisco Fed President Daly. We begin the day with Agency MBS prices slightly worse from Friday’s close and the 10-year yielding 4.24 after closing last week at 4.19 percent.
Employment and Transitions
“Join ICE and embark on an exciting career in mortgage technology! We’re redefining the industry with innovative solutions that enhance every step of the end-to-end mortgage lifecycle. Our open network integrates groundbreaking technologies, connecting origination and servicing seamlessly. ICE’s dynamic and collaborative environment is perfect for those eager to advance our cutting-edge origination and servicing tools, evolve our product and pricing engine (PPE), enhance our consumer engagement suite and help deliver best-in-class closing solutions. Whether you’re new to the field or a seasoned expert, we have opportunities to shape the future of mortgage technology and the industry itself. Explore our job openings and help us transform the industry at ICE!”
Top loan officer Alexandra San Martino joins Service First Mortgage to revolutionize her business! Top Loan Officer Alexandra San Martino has joined Service First Mortgage, and with Service First’s unmatched support and innovative technology San Martino plans to achieve exponential growth while providing exceptional service to her clients and referral partners. “Joining Service First Mortgage is a strategic move that aligns perfectly with my goals of business growth and team expansion,” said San Martino. “Service First’s exceptional support and innovative loan products will undoubtedly enable me to achieve remarkable growth in my business.” San Martino’s transition highlights Service First Mortgage’s commitment to excellence and innovation, offering loan officers top-tier resources, unparalleled support, and a collaborative atmosphere that fosters success and innovation.
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Best Home Equity Loan Rates Of 2024
Fifth Third Bank offers among the most customer-friendly home equity loans with the ability to tap more of your home’s equity and a lower credit score requirement than most competitors. The lender has a starting rate of 8.50% for a good-quality borrower. This places Fifth Third’s rates in the middle of its peers.
Loan TermsThe APR that Fifth Third advertises is offered to borrowers with the highest credit scores and qualifications. The lowest rate also includes a 0.25% discount for borrowers who set up automatic payments from an eligible Fifth Third account.
Not Available NationwideFifth Third operates in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina and South Carolina.
How to ApplyBorrowers can apply online. Customer support by phone is available Monday through Friday from 8 a.m. to 6 p.m. ET and Saturday from 10 a.m. to 4 p.m. ET.