Best Auto Repair Loans in July 2025

If you're facing an expensive car repair, an auto repair loan could help you cover it — and you could get the money you need as soon as the same day you apply. Our pick for best auto repair loans is online lender Upgrade. It offers competitive interest rates, loans for fair-credit borrowers, an autopay discount, and funding within one business day.

Personal loans for car repairs can provide an easier, more affordable alternative to putting the entire bill on a credit card — or haggling with the mechanic. You'll generally need at least fair credit and a verifiable income to qualify, though some lenders offer loans to bad-credit borrowers as well. Find out how an auto repair loan can help get your car out of the shop and back on the road.

Best auto repair loans

Methodology

To find the best auto repair loans, Credible evaluated 31 lenders using 899 data points. We focused on lenders that offer personal loans specifically for car repairs or major purchases. Our criteria also included interest rates, credit score availability, funding time, and discounts. Each data point was verified by a senior editor to make sure it was accurate at the time of publication.

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.

What is an auto repair loan?

An auto repair loan is typically any loan that can be used to pay for car repairs. Put another way, an auto repair loan is one place to turn if you have a car repair bill that your wallet doesn’t have the horsepower to handle. 

Some lenders offer personal loans specifically for car repairs, while in other cases you can use a personal loan for a major expense to pay a car repair bill. Other types of loans don’t require you to specify what you’re using them for.

How do auto repair loans work?

Auto repair loans typically have the following characteristics:

• Interest and/or fees: With personal loans, PALs and similar types of loans, the cost of borrowing is typically expressed as an annual percentage rate (APR, which includes the interest rate and any upfront fees). Borrowing costs may be calculated differently for options such as cash advance apps, which can include combinations of interest, fees, and tipping charges.
• Funds come in a lump sum: If approved, you typically receive the loan amount upfront.
• Repayment terms: Most loans are repaid in installments over a period of months or years, depending on the type of loan.
• Typically fast funding: Depending on the lender, you could receive your loan as soon as the same day you apply or within a few business days.
• No collateral required: Most auto repair loans are unsecured, which means they don’t require putting up items of value collateral.

Related: How Do Personal Loans Work?

Types of auto repair loans

Auto repair loans can include personal loans, bank loans, credit union loans, payday alternative loans (PALs), and more. 

Personal loans

For funding auto repairs, personal loans are often the best choice for borrowers who qualify because they tend to have:

• Fixed APRs that max out at 36% (as low as 7% APR)
• Higher loan amounts
• Quick, sometimes same-day, funding
• Repayment terms of one to seven years

Although some lenders offer personal loans for bad credit, borrowers with excellent, good, or fair credit scores typically qualify for lower interest rates and fees.

Bank loans and credit union loans

If you have a checking or deposit account, going to your bank or credit union for an auto repair loan might be a convenient option. Some offer APR discounts to existing customers. 

Also, a few banks offer short-term, small-dollar installment loans to qualifying customers. 

They generally have low borrowing limits of $1,000 or less and may be repaid in three monthly payments, with fixed fees instead of interest. You might qualify with poor or limited credit. Bank of America's Balance Assist and U.S. Bank's Simple Loan are two popular examples.

Compare: Credit Union vs. Bank: Which Is Right for You?

Payday alternative loans 

Payday alternative loans are small loans offered by many federal credit unions that provide an alternative to payday loans for eligible borrowers with bad credit or fair credit. They’re available for amounts up to $2,000 with repayment terms up to 12 months. Unlike payday loans, these are installment loans you make regular payments toward, and their interest rates are capped at 28%. To be eligible, you must be or become a member of a credit union that offers them.

Compare: Payday Loans vs. Cash Advance

How to compare auto repair loans

If you decide to take out a personal loan for auto repairs, consider these guidelines for choosing the right one for you:

1. Check your credit score: Check your FICO score to get a sense of the personal loan rates you might qualify for, or whether you'll qualify at all. If your FICO score is considered good, above 670, you're more likely to be approved for a loan at a reasonable rate. Some personal loan lenders have minimum credit score requirements.
2. Know how much you need to borrow: Review the work estimate you got from the mechanic. Do you need to borrow the entire amount, or do you plan to cover some on your own? You may want to consider borrowing more than the estimated amount, since that figure could change. If you do borrow more, be sure to repay what you don't use as soon as the car is fixed.
3. Prequalify with multiple lenders: Prequalification with a soft credit inquiry doesn't hurt your credit score and allows you to see the APRs, monthly payments, loan amounts, and terms you might qualify for with different lenders. Prequalification is not an offer of credit, however, and the rates and terms of a formal loan offer may differ. Also, a loan application with a hard credit inquiry can temporarily lower your credit score.
4. Compare APRs and loan terms: Credible and other personal loan marketplaces let you prequalify with multiple lenders and compare quotes for APRs, loan amounts, repayment terms, and fees. If a lender quotes multiple options for repayment terms, use a personal loan calculator to see monthly payments and interest costs over the life of the loan. Note that a longer repayment term often translates to a lower monthly payment, but also means more interest charges over time.

Learn More: How To Compare Personal Loans: A Step-by-Step Guide

Current auto repair loan interest rates

APRs for auto repair loans available through the Credible personal loans marketplace range from 6.99% to 36%. The APR accounts for the interest rate and any upfront fees. What you qualify for depends on factors such as your credit score, income, and overall credit history.

Auto repair loan rates by credit score

Here are the average APRs by credit score for auto repair loans from June 2024 to May 2025, according to Credible marketplace data:

Check Out: Current Personal Loan Interest Rates

What is the average cost of auto repairs?

Data from Kelley Blue Book parent company Cox Automotive estimates that the average car repair costs $548.32. The thing to remember about averages is that they factor in both low numbers and high numbers, meaning that major repairs could cost significantly more than the average figure.

According to AAA, here’s what you might expect to pay for some common mechanical repairs:

If your car is involved in a collision, you’re facing an entirely different set of repairs, costs, and variables. Depending on your insurance coverage and deductible, you may have to pay all or part of the costs out of pocket. Caliber, a nationwide collision repair and auto glass replacement company, estimates general price ranges for common collision-related repairs at:

Caliber notes that costs can exceed the typical price range, depending on the extent of the damage and whether it requires replacing the equipment entirely.

Data from the U.S. Bureau of Labor Statistics show that the combined cost of auto repair and maintenance rose 5.8% from February 2024 to February 2025. Experts blame rising repair costs on a variety of factors, including supply chain problems and technological advances that have made newer cars more expensive to fix.

Pros and cons of auto repair loans

Before taking out an auto repair loan, weigh the advantages and disadvantages.

Related: Should I Get a Personal Loan?

How to get a car repair loan

If you're ready to apply for personal loan for auto repairs, follow these steps:

1. Choose the loan option you like best: Once you've prequalified and compared lender terms, fees, funding times, and APRs, pick the loan option that works best for you.
2. Fill out the application: You'll need to complete a full application and submit any required documentation, such as proof of identity (with a government-issued ID) and proof of income (pay stubs or W2 forms). Be sure to provide accurate information and get any paperwork back to your lender quickly to streamline the process.
3. Review and sign the loan agreement: If you're approved, you'll need to read through the loan agreement and sign it. Make sure the terms are as expected — in particular, the loan amount, monthly payment, APR, the repayment period, and any fees.
4. Await your funds: Once you've signed, the lender will begin the process of funding your loan. With some lenders, you could see the money in your account as soon as the same business day. But, generally, you should expect a 2-3 day turnaround.

Related: How To Get a Personal Loan in 6 Steps

Alternatives to auto repair loans

If you prefer an alternative to a traditional loan from an online lender, bank, or credit union, other options include:

Cash advance apps

Cash advance apps provide quick funds, typically with no credit check. These loans have low maximums that generally cap out at $1,000 but often start lower the first time you borrow. Often, you borrow against your paycheck and are expected to repay your balance the next time you get paid.

Expedited payment fees, late fees, and subscription fees may apply. You can consider this option if you have poor credit or don't need to borrow much money, but avoid paying extra fees to expedite your payment.

Credit card

Using your credit card could be a good option for a small auto repair, but only if you’re not already near your credit limit and don’t have a substantial unpaid balance. Average credit card interest rates are 21.47%, according to the Federal Reserve. 

Some credit cards have a 0% APR introductory offer on new purchases, which could help you avoid interest for 6 to 21 months. The key is to pay off the entire purchase before the introductory offer expires and the card’s regular APR takes effect.

Home equity loan or home equity line of credit (HELOC)

With a home equity loan or HELOC, you can borrow against the equity in your home. A home equity loan provides the funds in a lump sum, while a HELOC is a type of revolving credit that works similarly to a credit card. Home equity financing options typically offer lower interest rates than personal loans and credit cards, but:

• You generally need to have built up 15% to 20% equity in your home to qualify.
• Approval can take weeks, making it a less viable option if you need to get your car back on the road right away.
• Appraisal fees, closing costs, and other charges typically apply.
• By using your home as collateral, defaulting could put you at risk of foreclosure.

Small Dollar Loan Program

The Small Dollar Loan Program (SDL Program) issues government grants that allow qualifying institutions to offer small loans to unbanked and underbanked borrowers, meaning individuals with less access to financial services and credit. Community Development Financial Institutions (CDFIs) receive funding awards that they can use to provide eligible loans to qualifying consumers. 

For loans to be funded with grants under this program, they must be $2,500 or less and repaid in installments, and lenders can't charge prepayment penalties and must report activity to the credit bureaus. Consumers can't get loans directly through the SDL Program. But if you think you might qualify for a CDFI loan, use the CDFI database to find an institution near you.

BNPL

Some auto repair shops may work with BNPL providers as an option for financing auto repairs. For example, Affirm works with repair shops, dealerships, and auto parts stores to help get you back on the road even if you don’t have the cash to pay upfront. 

BNPL providers like Affirm may provide 0% financing if you can afford an initial downpayment, then pay the loan back in three installments over six weeks.

Auto repair loans to avoid

Steer clear of the following auto repair loan types:

• Payday loans: Payday loans are a type of short-term loan with high fees and low borrowing limits. These are risky because they typically have to be repaid in as little as two weeks, which can lead to rolling over your loan or reborrowing to cover your debt. While payday loans don't charge interest, they generally charge sky-high fees per $100 borrowed that can equate to exorbitant rates. For example, $15 charged on a $100 two-week loan is equal to a 391% APR.
• Title loans: Title loans or car title loans are short-term, high-interest-rate loans you open using your car title as collateral. These loans provide immediate funding but have very short repayment term lengths, usually one month or less, and exceptionally high monthly finance fees that come out to 300% APR or higher, plus a number of possible service fees. You also risk losing your car if you can't repay your debt.
• Pawnshop loans: Like title loans, pawnshop loans require collateral and carry high interest rates and monthly fees that may come out to 20% to 25% a month. You can use nearly any valuable item as collateral, such as jewelry or collectibles, but you agree to hand over that item permanently if you can't pay. These loans are opened with pawnshops and are easy to get, but they can be dangerous and costly for borrowers.

Disclosure: Some lending partners that participate in Credible’s comparison marketplace offer loans to borrowers with scores as low as 550. Borrowers with low scores will have fewer lending options than borrowers with higher credit scores.