Need to Pay for Auto Repairs But You’re Short on Extra Cash? Consider All Your Options
If you have bad credit and meager savings, you might think that a predatory no credit check loan is the only way you’ll get back on the road. It’s not.
Winter isn’t coming. It’s here. And much like how the good people of Westeros now have to deal with ice zombies, dragons, and zombie ice dragons, winter arriving can make taking care of your vehicle even more challenging. Ice zombies might not be a big problem for you, but icy roads sure can be.
Unless you’re well-versed in auto-mechanics, your car breaking down is going to mean paying someone else to repair it. That can get pricey, and fast.
Auto repairs are expensive, but people need their cars.
For most people, reliable access to transportation is essential for maintaining a job. According to data from the U.S. Census Bureau, about 85.4 percent of workers commute to work in an automobile. And while the rate is lower in major cities due to more options for getting around, 45 percent of Americans still don’t have access to public transportation.
If your car breaks down, the financial burden is twofold. Repairs can be costly, and 40 percent of Americans don’t have $400 saved to cover an emergency expense. Plus, if you can’t access your vehicle to get to work, you’ll miss out on that needed income as well.
Enter predatory payday loans.
It’s common for people who have bad credit are short on extra cash to turn to payday loans to cover auto repairs. These short-term, small-dollar loans are quick and easy to obtain, but they carry high interest rates and fees that most borrowers can’t afford, according to research from Pew Charitable Trusts.
With payday loans, you typically don’t have to undergo a credit check when you apply for one. This might seem like a great boon for folks whose poor credit scores have locked them out from traditional lending institutions. And it really can be, depending on the lender
The problem with many payday lenders isn’t that they skip traditional credit checks. It’s that they don’t perform any due diligence on their customers and whether or not they can afford the loan they’re borrowing.
When your lender doesn’t care whether or not you can repay your loan, it’s all too easy to fall into a predatory cycle of debt. The same doesn’t just apply to payday loans, but to any bad credit loan offered by a lender who doesn’t check your ability to repay.
If you need your car repaired but are strapped for cash, consider all other options before taking out a risky no credit check loan or cash advance. Here are some of the ways you can get back on the road without sending your finances into a tailspin.
Apply for government assistance.
The Department of Health & Human Services in each state offers assistance to low-income families for a variety of needs. Only a few states provide car repair assistance, but other programs can help defray costs that will help you save more of your income for an emergency.
Check your eligibility for healthcare assistance, food assistance, and housing assistance at your local office or state’s website.
Ask family or friends for help.
It can be difficult to ask for help, but getting financial assistance from a friend or family member will likely be the quickest option that’s feasible for you to pay back. Explain your situation and why you need the money.
If you ask respectfully and demonstrate a repayment plan, you might be surprised to find people willing to assist you, especially in the case of an emergency.
Contact a charitable organization.
There are many local and national nonprofit organizations that assist low-income families with low-interest loans and grants for a car purchase or repair, and some that even donate free cars. The following resources may help:
Take out a lower-cost loan.
If you can’t get a low-cost personal loan or charitable grant, consider other options that are less costly than payday and title loans. You can try applying for a credit card or talking to local banks or credit unions about low-interest loan options.
Many local credit unions offer Payday Alternative Loans (PALs) that would be a great fit for your situation. However, you have to have been a member of the credit union for one month in order to apply for one. Joining a credit union now so that you can access a PAL later would be a wise financial decision.
If you have bad credit and can’t access these alternatives, you could also consider taking out an installment loan to cover your auto repair. These loans have longer terms and lower interest rates than payday loans. Spreading out the cost of your loan also means smaller, more manageable payments that are usually easier to repay.
The right installment loan could also help your credit. Installment lenders like OppLoans report online loan payments to the credit bureaus, something that most payday lenders don’t do. This means that on-time payments get recorded on your credit report. Your payment history is the single biggest factor in determining your score.
The best way to pay for a car repair is to avoid borrowing altogether. This will mean building up an emergency fund that you can tap when times are tough and you need cash fast.
Once your car is fixed and you’re back to work, set up a budget and savings plan or secure additional income to prepare for future emergencies.
Better yet, start building your emergency fund now while your car is running perfectly fine. That way, you’ll be prepared for when disaster strikes.
We’d compare it to how the people on Game of Thrones built The Wall to keep out the ice zombies … which it did! Now, it didn’t keep out the zombie ice dragon, sure, but that’s not something you’ll have to worry about. Anyway, this metaphor’s falling apart. Drive safe!
To learn more about how you can improve your financial situation, check out these related posts and articles from OppLoans:
- A Beginner’s Guide to Budgeting
- 8 Good Habits to Get Your Finances—and Your Life—on Track
- Your Guide to Escaping a Debt Trap
- 8 Ways To Save Money Today, Tomorrow and Every Day After
The information contained herein is provided for free and is to be used for educational and informational purposes only. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. Articles provided in connection with this blog are general in nature, provided for informational purposes only and are not a substitute for individualized professional advice. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through the OppLoans blog.