You will need a car to run errands, commute, or other purposes. However, maintaining a vehicle could be expensive. You are likely to spend thousands of dollars yearly to keep your car in good condition. Some auto maintenance tasks are predictable, and you can factor them into your budget. You can set aside some money to replace vehicle parts like tires or brakes.
Unfortunately, you may need an emergency auto repair if any part of your car malfunctions. Driving the vehicle in such a condition is unsafe. As a result, you have to figure out how to pay for car repairs. The unplanned expenses can reduce the amount of your budget. Cash payment is the best approach for funding auto repairs. However, you may have to consider the following alternatives if an emergency occurs.
Get a loan
If you don’t have the cash to finance your car repairs, you can borrow money. You may consider these available options:
- Personal loan
- Title loan
- Payday alternative loan
Personal loan: This borrowing option has lower fixed interest rates than credit cards. You can spread the payments over a given repayment period, usually 1 to 5 years. You will need collateral to back up a secured loan. The property or other valuables you pledged as security reduces the lender’s risk. As a result, you will easily get qualified not only for loans but more significant amounts and even at lower interest rates.
Are you worried about securing a personal loan because of your poor credit status? Pledge security to get secured loans. You can apply for loans with bad credit in Canada However, the lender can seize the collateral you pledged if you default in payments. You can get a loan without collateral if you are creditworthy. You may be lucky to obtain an unsecured loan if you have bad credit, but the APR rates will be high.
You can opt for this type of loan if you have used other borrowing options. Though it’s expensive with up to 300% Annual Percentage Rate (APR), it has some benefits. Pledging collateral makes it easy to qualify for loans. Some lenders may request for a quarter or half of your car’s worth. Besides, you can borrow money if you have bad credit status. Apply for loans with bad credit in Canada if you want to fund auto repairs.
Payday Alternative Loan (PAL): Federal credit unions provide this type of short-term loan. Its interest rates is affordable. However, you must belong to a credit union that offers this type of loan to obtain it.
Use a credit card
You can easily fund car repairs if you have available credit on an open card. A card with 0% APR allows you to finance auto repairs interest-free. Some issuers offer such credit cards for promotional purposes. You can apply for one if you have no credit card. An issuer may also provide incentives like reward points for the first few months of card usage.
Some auto repair shops partner with lenders to facilitate funding of their services. You may be lucky if the lender offers discounts or no-interest introductory rates. However, check the rates after the promo period before choosing this borrowing option. Some offers may have high-interest rates after the promotions.
It would be best to save money for auto repairs. Besides the loan options discussed, you can borrow money from family and friends. However, shop around for the best deal on car repairs to cut costs.