Right when you think you’ve got life by the horns, you’re putting money in the bank and everything is going your way – your car decides to give out. Now, you’re scrambling to find the cash you need to pay the repair shop and you’re running out of ideas. You’ve even considered submitting yourself to the local payday lender because your credit is shot and you need your car fixed now.
Wait! Before you dive into the depths of financial despair, we’ve got an affordable alternative loan to help you with car repairs or anything else you need it for and help you weed out dangerously expensive loan options.
What happens if you can’t afford your car repair
Getting to and from your job, school, or daycare with a reliable car is critical. When your car breaks down and expensive auto repair bills are plaguing your bank account, panic mode starts to set in. Not paying your car repair bill can result in your car being repossessed by the auto shop or mechanic.
Read on to find out more about what a mechanic lien is and how to avoid them.
How does a mechanics lien work?
Each state has its own set of laws governing mechanic liens, however, in some states after a period of unpaid time the mechanic or shop has the right to sell your vehicle for a profit. In some states, you have as little as 15 days after the repairs are complete to pay your bill.
At that point, the mechanic or shop must fill out an application and provide documentation to the DMV for possession with intent to sell to an auction or third party. These documents could include signed repair authorization from the vehicle owner, storage contract, or certified mechanic lien intent letter to the vehicle owner.
Reach out to your state’s transportation agency to find out more about the process and local laws.
How to avoid a mechanics lien
You can avoid outstanding repair bills and risking a mechanics lien on your car by using our tips and recommendations for reasonable borrowing options.
Instacash
Need a smaller repair like an oil change or brakes? Don’t worry yourself about pesky loan paperwork and eligibility requirements. You can simply download the MoneyLion app, link your checking account and get up to $250 InstacashSM with no interest! No credit check needed and you can get instant access to cash with turbo delivery for a small fee!
Credit builder loan
Struggling to find affordable loan options with poor credit? Look no further! A Credit Builder Loan may be ideal for anyone looking to establish or improve their credit rating.1 Once you get a Credit Builder PlusSM membership for only $19.99/month, you can access a credit builder plus loan, Instacash advances, budgeting tools, and 24/7 credit monitoring. Over your 12-month loan term, we’ll report positive payment history to all the credit bureaus. More than half our members raised their score by up to 27 points within 60 days!2
Credit card
Using credit cards to cover emergency expenses is common, especially considering the money is available for use instantly. However, this option can be one of the higher-cost options. Considering the APR can be in the 20% range and it can be easier to go into debt. Nearly 47% of American adults hold credit card debt and it’s easy to see why!
Auto repair loan
An auto repair loan is typically in the form of a personal installment loan. This term is often used by auto shops offering an in-house financing option for those needing assistance with their repair costs. Depending on the shop, interest rates and terms can vary.
Steer clear of overpriced lending
Some payday lenders, vehicle title loans, and credit cards can charge upwards of triple-digit APR’s attached with unrealistic terms. These predatory lending options can end up costing you hundreds or thousands in fees and the possibility of your car being repossessed.
However, there are alternative options that can provide the relief you need without putting you in mountains of debt–even for those with poor credit. Steer clear of these expensive loan options and research which alternative is right for you!
Payday lender
As discussed before, this option could cost you up to 400% APR. Although this option is easy, fast, and convenient, a lot of people who use it get into deeper debt because of unrealistic repayment terms. When you can’t pay your payday loan back in time, often the lender offers for you to roll your existing contract into, making matters worse and fees higher. You’ll end up paying thousands of dollars more than your repair bill.
Title loan
This option is one of the riskier ones because the terms are short (can be up to 15 days) and the title of your car is used as collateral. If you fail to pay your bill in time, your vehicle will be repossessed.
Compare average borrowing fees to MoneyLion alternatives
| Credit Builder Loan | Instacash | Credit card | Payday loan | Title loans | |
| APR | Competitive | 0% | 15.91% to 22.87% | Up to $400% | Up to 300% |
| Fees | $19.99/mo | $1/mo | Up to $38 late fee | $10-$30 for every $100 borrowed | 25% per month |
| Delivery of funds | Same-day funding | Instantly* | Instantly | Same-day funding | Same-day funding |
| Loan terms | 12 months | 2 weeks/Next payday | Revolving | 2 weeks/ next payday | 15-30 days |
Cover auto repair costs with a Credit Builder Loan
Ensuring you have low-cost, approachable, and effortless financial tools is part of the MoneyLion motto. From 0% interest cash advances to a fully managed investment portfolio, we are your finance one-stop-shop!
