Auto repair loans: Find available options in South Africa
There’s no doubt that having a car makes life easier. But, what happens if your car suddenly breaks down and your bank account is low? Sometimes, not having a car is not an option. Instead, the only option might be an auto repair loan that gets your car working as fast as possible.
Whether it’s your fuel injector or transmission that needs fixing, there are several financing options available in South Africa. If that sounds like a workable solution, then keep reading to find out all about auto repair loans and how they can make a difference to your situation.
5 types of car repair loans
A good credit score can help you get a low-interest personal loan. Typically, these are unsecured with borrowing limits that are between R2000 and R300 000 and loan terms of up to 72 months. However, to get the best deal and save on cash, a small loan amount with a short term is a more suitable option. Personal loans.
If your car repairs can’t wait until month-end then a payday loan can cover you until your salary arrives. Although they have high interest rates, payday loans are one of the most preferred auto repair loans for bad credit. Payday loans.
Car title loans. An auto title loan requires you to use your car title as collateral. If you fail to repay, you might lose your vehicle. Therefore, it is best to check what you can afford before applying for this type of loan.
Credit cards. If you still haven’t reached the limit on any credit cards you own, a simple swipe can pay for the needed repairs. You then pay back the credit via monthly instalments. It’s also a good idea to apply for a new credit card, especially if it offers a discounted and low starting interest rate. Besides fixing your car problems, this helps to build up credit if the discount is applied over many months.
Overdrafts. Like a credit card, an overdraft gives you a line of credit that is linked to your bank account. As long as the overdraft fee is not too expensive, you can pay for small car repairs. To avoid late payment fees, check if your account is expected to receive cash before the due date arrives. What are the common uses of auto repair loans?
An auto repair loan covers many aspects of car repair, including the following:
Car parts. Depending on the problem you might need to buy a new car part to replace any defective pieces. The most commonly replaced car parts are batteries, drive belts, alternators, and head gaskets.
Towing. If your car breaks down at an inconvenient location, you might have to pay for roadside assistance or towing, especially if your insurance does not cover the service.
Labour. The mechanic will charge you for any labour and time spent doing repair and service work. Common car repairs include fixing a blown transmission, suspension, and the engine and cylinders. However, it might not be a good idea to take out a loan for these non-essentials:
Paint repairs; and
Car seat upholstery.
How to compare auto repair lenders
When you borrow money, it is best to deal with a trusted lender that understands your auto repair needs. Important things to look out for include:
Positive reviews from other customers;
Excellent customer service;
The lender should be fully registered and authorised to offer financial services;
Transparency and honesty when giving out any information related to the loan.
How to compare the best auto repair loans in South Africa
Interest rate and APR. An auto repair loan should be affordable with a competitive interest rate and minimum fees. Use the APR or comparison rate to check for low-cost options since it includes the interest rate plus any other charges or fees added to your loan.
Flexible payment options. You should be able to get back on the road while paying back your loan at a pace that is comfortable for your wallet. On the other hand, if you wish to make early or additional repayments, you must be able to do so without getting charged a penalty fee.
Easy application and fast loan processing. Most auto repairs need an immediate response. Usually, online auto repair loans are recommended since it’s possible to make an application on your phone or computer and receive the cash within minutes. Auto repair loans: What you need to apply
Lenders will often expect borrowers to meet the following requirements in order to qualify for an auto repair loan:
Minimum of 18 years;
Valid copies of your South African ID;
Proof of income – Your bank statements and payslips;
Proof of residence; and
A good credit score (this might not be necessary in the case of short term loans for auto repair).
Auto repair loan calculator: Find monthly payments you can afford
auto repair loan calculator is a convenient tool from CompareLoans. It helps you to find the best loan option in terms of what you have to pay back every month. Begin by adjusting the sliders to choose your loan amount and the repayment period.
Once you click “Calculate Repayment” the results will appear in the comparison tables below the calculator. That means you’ll be able to see the expected monthly payment amount for various lenders for a particular loan.
Applying for an auto repair loan
If your car needs repairs in a hurry, we recommend you make an online application for your auto repair loan. To save you time we have showcased top South African lenders in our comparison tables and you can apply online by clicking the “Go to Site” button of your choice.
5 tips to help you save cash when choosing an auto repair loan
Use some of your savings or borrow from family and friends.
Look for several quotations instead of going to the nearest mechanic.
Ask for a discount on labour and car parts.
Check if your insurance can cover some or all of the costs.
Avoid financing unnecessary repairs, for example, any cosmetic repairs. Instead, work on building an emergency fund to avoid interest charges and fees in the future.
Paying for auto repair vs. buying a new car
An auto repair loan might be a waste of time if your car has significant damages. Asking yourself these 5 questions helps you to reach a better decision:
How much will the repairs cost? – If the car repairs are more than the value of your car, then it’s best to consider vehicle finance.
How long will it take? – A quick repair is better than a long vehicle financing process, especially if you rely on your car full time to get from point A to point B.
Is the car fully paid for? – You might not be able to afford a new car if you’re still paying off a previous loan. Popular vehicle finance searches
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