Car repair loans in Australia – Make your car roadworthy
When your car suddenly conks out, it can bring your plans and everyday activities to a screeching halt. Even a small problem can easily turn into an eye-watering bill from your mechanic when you wait too long. If you’re hard up on cash and a DIY approach isn’t an option, you might want to look into car repair loans and how they work.
How do personal loans for car repairs work?
A car repair loan is a handy type of personal loan that car owners turn to when their ride needs a professional tune-up. Most Australian lenders offer car repair loans, which are often vital owing to the unpredictable and sometimes expensive nature of car problems. That means if your car decides to suddenly bailout, you can still spring for repairs that you hadn’t budgeted for.
You then repay the lender in a series of repayments that also cover borrowing costs, such as interest, fees, or other loan charges. In the meantime, you’ll be able to drive to work, pick up the kids, or run errands with a roadworthy vehicle that gives you peace of mind.
Main features of vehicle repair loans
Here’s what you might find under the hood when it comes to car repair loan deals:
- Secured. A secured personal loan typically has a higher chance of pulling through the application process since it carries less risk for the lender. The catch is you’ll have to put up an asset as a guarantee. The asset, which can be a car or property, is something for the lender to latch on to if you fail to repay. For this reason, most lenders offer lower rates for unsecured loans, and some even provide them to bad credit borrowers.
- Unsecured. If you have a well-built credit score, an unsecured personal loan is a fairly hassle-free option since it doesn’t require collateral. However, expect to see offers with higher interest rates than secured loans.
- Fixed rate. A fixed interest rate does just as its name suggests. What the lender offers is what you’ll get throughout the repayment process. There are no unexpected increases. But the downside is you won’t get rate cuts either, even when market rates turn favourable.
- Variable rate. A variable-rate will likely not stay as faithful as a fixed rate since it’s influenced by the Reserve Bank cash rate. If it goes down, you save, but if it pushes up, your repayments also increase.
What will an auto repair loan help you fix?
Depending on the car type and model, you can fix a fault on the cheap or pay a pretty penny to ensure a smooth ride when back on the road. Fortunately, personal loans are flexible enough to cover any rattling, squeaking, or whistling issues your vehicle might be having.
Here are some common issues that warrant a visit to the mechanic:
- Sputtering engine
- Worn brake pads
- Failing alternator
- Leaking radiator
- Blown gasket
- Gearbox and transmission problems
- Broken cylinder
- Dings and dents to the body
Because personal loans are so versatile, you can even use some of the funds for regular maintenance and service. If you have extra change, you can also pay for other unrelated emergencies, for instance, going to the dentist.
How to choose the best car loan repair option
Ready to compare car repair loans? Asking yourself the following questions will help point you in the right direction to a fix that meets your budget and needs:
- What’s the lowest rate I can get? – Running down a list of top options is the best way to spot a cheap deal. Our comparison table above makes it a lot easier to do this. But remember, there’s more to a good bargain than a low rate.
- How much do I pay overall? – Don’t forget loan fees and charges, which can rule out the benefits of a low rate. Look out for establishment fees, monthly service fees, penalties for late payments, plus other costs. Also, check the comparison rate, which folds the interest rate and standard fees into one percentage.
- How much do I pay for each repayment? – Find out how much the loan will cost you per instalment. Our car loans repair calculator is good for the job – simply enter your desired loan amount and loan term to get an estimate.
- How much flexibility does this option give me? – A flexible loan has a repayment schedule you can fit into your household budget, whether it’s weekly, monthly, or fortnightly. It should also include penalty-free early repayments so you can pay off your debt faster if you want to save.
- Can I get a quick car repair loan? – When you rely on your car most of the time, you need a lender who is fast on their feet. Find out how long it will take for the cash loan to end up in your account.
Car repair loans FAQ
How do I apply for a car repair loan?
To apply for a car repair loan online, scroll up to our product table above. Compare loans to make a selection, and then click “Go to Site” to access the lender’s application page.
Can I use a credit card to pay for any vehicle repairs?
Credit card rates are not generally not as friendly as what you’ll find attached to personal loans. However, the option becomes viable if you bag one with an introductory 0% period.
Can I get a loan to buy a new car instead of fixing it?
It depends on the cost of repair vs buying new. First, find out your vehicle’s current value and cross-check it with the repair bill from your mechanic. If the two figures are almost the same, it might be worth taking out a car loan instead.
How much will I be able to borrow?
Car repair jobs can cost anywhere from $300 to $5,000 or even more. How much you borrow depends on several factors, such as:
- Type of car fault you’re dealing with
- Whether you also plan to use the funds for other purposes
- Your credit rating and income
- How much your budget can afford
- The lender’s maximum and minimum limits
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