A car can break down without warning. Sometimes it goes out of commission with no tell-tale signs, and other times you ignore them, which leads issues to snowball into bigger problems. Maybe your engine refuses to start before work, or the brake oil has leaked. Maybe you need to have your windshield replaced as it was shattered by a hailstorm, or the car's roof was buckled under the weight of a fallen tree.
Unexpected car repairs may cost you a lot of money. They put financial pressure when your emergency cushion has fallen short of cash. Even minor repair work could blow your budget. Depending on the extent of damage, brake repairs might cost you between £250 and £700. The starting cost of engine-related issues is £2,000.
It could be seriously challenging for you to foot the bill in the absence of an emergency corpus. Covering the cost out of pocket will leave you with insufficient funds for essentials, potentially leading to a recurring cycle of debt.
The good news is that you can cover repair costs with same-day funding sources. They are available from direct lenders, credit unions, and peer-to-peer lending platforms.
What is a same-day loan for car repairs?
A same-day loan is a small emergency loan aimed at subprime borrowers to help tide them over during financial emergencies. They can be brought to use for car repair expenses as well. Here are the features of same-day loans:
§ The maximum loan amount is up to £1,000.
§ They are paid back in a lump sum.
§ The repayment term is not more than 30 days.
§ The approval is made the same day you put in a loan application.
§ Lenders emphasise your overall credit profile rather than only your credit score.
Same-day car repair loans with instant approval can be used for the following expenses:
§ Medical bills
§ Urgent vehicle repairs
§ Unexpected utility bills
§ Travel emergencies
§ Small urgent home improvements
Funds will be disbursed the same day into your bank account. Some lenders specialise in providing same-day loans for car repairs. They transfer funds directly to your mechanic.
Financing options for emergency car repairs
Same-day loans are not a specific type of loan product. All short-term loans that are approved the same day are called same-day loans. Before applying, it's important to understand that there are various types of small loans that are available to pay for car repair expenses.
§ Small personal loans
A small personal loan is also called a short-term loan without a guarantor, which can be obtained instantly. These loans come in handy when you need a large sum of money. For instance, engine repairs cost a lot of money.
While most of the same-day loans are paid back in one fell swoop, small personal loans are paid down in fixed instalments. Since the loan amount is large, the cost of the debt can be spread across months. The repayment term depends on the loan amount and your repayment capacity.
They could prove to be a better choice when you need a larger sum of money because:
§ Approval is made fast despite your credit score check
§ Monthly payments remain unchanged, so you do not struggle to repay the debt.
§ Neither guarantor nor collateral is required.
Small personal loans are a better alternative than short-term, high-cost payday loans. The following table reveals the difference between personal loans and payday loans:
|
Aspects |
Small personal loans |
Payday loans |
|
Loan amount |
Up to £5,000 |
Up to £500 |
|
Repayment term |
A couple of months |
Due by next paycheque |
|
Approval process |
APR up to 99% |
APR up to 1200% |
|
Repayment method |
Fixed monthly instalments |
A lump sum payment on due date |
|
Risks |
Moderate risk |
High risk |
§ Auto repair financing
Auto repair financing is also a suitable option when others seem to be a bit expensive. Some garages partner with financing companies to enable customers to split costs into monthly payments. Ask your mechanic if they have any financial options available. Understand them carefully before clinching a deal.
§ Credit union loans
Credit unions also provide small emergency loans, but they charge lower interest rates. However, you must have an account with a local credit union to be eligible for these loans. What makes these loans better than traditional loans is:
§ Lower interest rates
§ Faster processing
§ More flexibility
This can be a good funding option for borrowers with fair or limited credit history.
§ Credit Cards
Using a credit card can also help cover immediate repair expenses, provided you have the potential to repay the balance on time. Credit cards are normally the best alternative funding source when it is a 0% credit card.
Standard credit cards also do not charge interest during the grace period. Once this period is over, interest will be charged by the day. In order to avoid being charged interest rates, make sure you settle the bill within that window of time.
How to get a same-day loan for car repairs?
Here are the steps you should follow to get a same-day loan for car repairs:
§ Determine how much money you need. Consult several mechanics and get quotes from them. Check how much money your savings have to bear the cost. Borrow only what is necessary.
§ Compare multiple lenders. The basis of comparisons includes interest rates, APRs, repayment terms, and turnaround time.
§ Check lenders' reputation and registration. Compare their offerings with other alternatives as well. This will help you choose the most affordable funding option.
§ Once you have chosen a lender, submit your application. Provide the documents they need.
§ Review the loan agreement. Read the fine print so you know you are not being charged hidden fees.
The bottom line
Getting a same-day loan for car repairs is not difficult. You can consider various funding options such as small personal loans, credit cards, credit union loans, and auto repair financing. Make sure that your credit score is not extremely poor and you have the potential to pay back the lender.
