What Are the Different Ways to Fund Your Car Repairs?
If you’re planning to undertake a car repair or upgrade project, be warned: even the smallest repair can eat up significant chunks of your savings. And let’s not forget about the horrors of sudden emergency repairs – they’re never convenient and always tend to strike up when we’re least able to afford them. So, if you are stuck in this situation, don’t fret. You aren’t alone, and you have more options to finance your car repair than you might realize.
Therefore, in this blog post, Jacaranda Finance shares some of the best ways to fund your car repairs so that you would not have to exhaust your years-long savings entirely.
#1: Credit Cards
Getting a credit card can be a great way to finance car repairs, especially if you need a small amount. Commercial banks generally offer credit cards to their customers that they must pay off by the end of each month.
Why you should use credit cards for car repairs:
· Fast and easy cash for emergency repairs
· Opportunities to earn lucrative points/rewards
Why you shouldn’t use credit cards for car repairs:
· In case of missed payment, you may have to pay high interest and fees
· Costlier in the long run
· Short payment cycles
#2: Car Repair Loans
These are unsecured personal loans, meaning you won’t be asked to provide any form of collateral for the borrowed loan. And this is one of the reasons why so many car owners prefer this option for funding their car repairs.
Plus, even if you default on the loan, the lenders would not touch your assets. Nonetheless, be aware that these loans can come accompanied with high-interest rates and fees. They also have lower borrowing limits in contrast to secured loans.
Why you should use car repair loans for auto repairs:
· Fast cash service is available
· Quick application process
· Funds come in a lump sum
· No collateral required
Why you shouldn’t use car repair loans for auto repairs:
· Potential negative impact on your credit score
· Potentially high fees and interest rates
· Short payment cycles
#3: Secured Loans
Unlike car repair loans, to get a secured loan, you will have to provide collateral, typically your car or vehicle. These loans indeed come with lower interest rates and greater flexibility; it’s important to note that they do put your assets at risk. Nonetheless, they’re an excellent option to finance your auto repairs, especially if you need a greater amount of money.
Why you should use secured loans for car repairs:
· Avail larger amounts of cash at lower interest rates
· Provides an opportunity to improve overall credit rating by making timely payments
· Longer repayment terms
Why you shouldn’t use secured loans for car repairs:
· Long application process
· Banks require collateral
· If you fail to make payments, you may lose possession of your assets kept as collateral.
There are several other ways to fund your car repairs; however, remember that every option comes with certain pros and cons. As long as you avoid getting the help that you can’t afford and closely review your situation, there is always a way to carry out the auto repairs and upgrades you’ve been dreaming about.