Best Auto Repair Loans July 2025

Top Auto Repair Loan Providers

Credible

Get auto loans from top lenders

View Rates Credible review »

580

Min Credit Score

4.60-35.99%

APR. Fixed Rate

$600-$100K

Loan Amount

1-7 Years

Repayment terms

Yes

Soft Credit Pull

Marketplace

Lender Type

N/A

Other Fees

None

Origination Fee

None

Prepayment Fee

3 days

Funding Time

Auto Loan Refinance

Min 4.60%

APR. Fixed Rate

Pros & Cons

• Simple, streamlined prequalification and application process
• Live customer support (uncommon among loan marketplaces)
• Several other loan types are available

• No official auto purchase or refinancing loans — only personal loans
• Not a direct lender

Auto Loan Types

• Secured Auto Loans
• Unsecured Auto Loans

Vehicle Types

• Car
• Motorcycle

LightStream

Low-Interest, Fixed-Rate Loans

View rates LightStream review »

660

Min Credit Score

3.99-20.49%

APR. Fixed Rate

2.99-20.49%

APR. Variable Rate

$5K-$100K

Loan Amount

24-84 months

Repayment terms

No

Soft Credit Pull

Direct

Lender Type

None

Other Fees

None

Origination Fee

None

Prepayment Fee

48 hours

Funding Time

Pros & Cons

• No mileage or vehicle type restrictions
• Lightstream lends to people in all 50 states
• Low rates for borrowers with great credit

• Loan rates are 0.50% higher without AutoPay
• Hard credit check to get approved
• Minimum credit score required for approval, regardless of other qualifications

Auto Loan Types

• Secured Auto Loans
• Unsecured Auto Loans
• Simple Interest Loans

Vehicle Types

• Car
• Motorcycle
• Truck
• EV
• Snowmbile
• Auto Repair
• Watercraft

PenFed Credit Union

New and used car loans and refi

View Rates PenFed Credit Union review »

4.74-7.74%

APR. Fixed Rate

$500-$150K

Loan Amount

36-84 months

Repayment terms

Yes

Soft Credit Pull

Direct

Lender Type

N/A

Other Fees

None

Origination Fee

None

Prepayment Fee

24 hours

Funding Time

Auto Loan Refinance

5.44-7.74%

APR. Fixed Rate

$500

Refinance Amount

Pros & Cons

• Loan terms range up to 84 months, providing flexibility in repayment.
• PenFed auto loans come with no prepayment penalties or hidden fees.
• PenFed offers a car-buying service with potential discounts on vehicles.

• You must be a PenFed member to qualify for a loan.
• The lowest rates are available only to those with excellent credit.
• Fewer physical branches, and most services are conducted online.

Auto Loan Types

• Unsecured Auto Loans
• New Car Loan
• Used Car Loan
• Auto Refinance Loans

Vehicle Types

• Car

Auto Repair Loan: Definition

Auto repair loans are similar to personal loans, which can come from various financial institutions. Traditional banks, credit unions, and even online lending platforms have them available. These types of loans are pretty specific, they are tailored to each lender to cover the costs of car repairs.

Car Repair: Key Terms to Know

In order to understand how auto repair loans work, let's get familiar with some of the most common terms you might come across:

• Annual Percentage Rate: APR is the amount you’ll pay to borrow the money, including interest and fees, given as a yearly percentage. The higher the APR, the more you’ll owe in return for the loan.
• Credit Score: This is a numerical representation of creditworthiness based on your credit history. Lenders often look at these to determine the interest rate they offer or simply to determine eligibility. A higher credit score is better and typically corresponds with lower interest rates.
• Principal Amount: This is the original amount of money borrowed in a loan, the amount that the interest will be calculated on. The principal amount does not include any interest or fees.
• Prepayment Penalty: Some lenders will charge a fee if you wish to pay off your loan earlier than the agreed term. It compensates the lenders for the interest they would have received had you carried out the planned payments.

Auto Repair Loan: How it Works

An auto repair loan works much like a personal loan. Here’s a general breakdown:

1. Application: Begin applying with the financial institution of choice, either a bank, credit union, or online lender. You’ll likely have to provide details about the repair, income, and credit history.
2. Approval: The lender will assess your application, check your creditworthiness, and determine the loan amount you qualify for. Your credit score is probably the most important thing in figuring out the loan terms.
3. Loan Terms: Once approved, you’ll then be presented with loan terms. These include the interest rate, monthly payments, and the loan duration. Review these details carefully and read the small print!
4. Funding: After agreeing to the terms, the loan amount is either deposited directly into your bank account or paid directly to the auto repair shop.
5. Repayment: As with any other loan, you’ll be required to make monthly repayments over the agreed loan terms until the loan is fully repaid. Some lenders might be flexible with early repayment options without penalties.

Typically, the amount for loans to fix your car ranges between $500-$25,000, depending on the car and the extent of the damage. These loans are designed to be processed quickly, understanding that the borrower needs the funds to start the repair on their car. Many institutions will lend in just a day or two, but ensure you borrow only what you need and do your due diligence beforehand.

Auto Repair Loan Rates and Fees

The best auto repair loan companies offer rates between 4.60% all the way to almost 36% interest. This wide range is due to several factors:

• Credit Score: A higher credit score can secure you a lower interest rate, with excellent credit scores receiving offers at the lower end of the range. Those with poor credit might have a tough time securing a low rate.
• Terms: The length of your loan can also influence the rate. Shorter-term loans might have higher monthly payments but come with lower interest rates, and vice-versa.

One thing to note is that APR is commonly used, but some lenders may quote in APY (Annual Percentage Yield), which includes the effect of compounding.

Types of Auto Repair Loans

There are a few types of auto repair loans:

1. Installment Loans: These have fixed monthly payments over a set period, typically with a fixed interest rate.
2. Unsecured Loans: This type is the most common which means that the loans don’t require collateral but likely have higher interest rates.
3. Secured Loans: Car repair loans can be secured as well. These require some form of collateral, usually the car itself. If you default, the lender can take the collateral as a form of repayment.
4. Title Loans: This is a type of secured loan where the vehicle’s title is used as collateral. Watch out for higher rates and riskier terms.

Auto Repair Loans Pros and Cons

How to Apply

1. Choose a Lender: Research and select from various financial institutions available.
2. Gather Documents: Lenders typically want to see proof of income, credit history, and repair estimates.
3. Complete Application: Either online or in-person applications can be made, including the required loan amount and other personal details.
4. Wait for Approval: Time can vary, but online lenders typically have the fastest responses.
5. Review and Accept Terms: Always read the fine print before accepting any loan!

Conclusion

Auto repair loans can offer a helpful solution for those in need, and by understanding the various options available, you can secure the best auto repair loan available. Always remember to borrow responsibly and do your due diligence when reviewing loan terms and lenders.