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!
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Disclosures
Instacash® is an optional service offered by MoneyLion. Your available Instacash Advance limit will be displayed to you in the MoneyLion mobile app and may change from time to time. Your limit will be based on your direct deposits, account transaction history, and other factors, as determined by MoneyLion. Expedited delivery requires Turbo Fee. See Instacash Terms and Conditions for more information and eligibility requirements.
Credit Builder Plus membership ($19.99/mo) unlocks eligibility for Credit Builder Plus loans and other exclusive services. This optional offer is not a Pathward product or service. A soft credit pull will be conducted which has no impact to your credit score. Credit Builder Plus loans have an annual percentage rate (APR) ranging from 5.99% APR to 29.99% APR, are made by either exempt or state-licensed subsidiaries of MoneyLion Inc., and require a loan payment in addition to the membership payment. The Credit Builder Plus loan may, at lender’s discretion, require a portion of the loan proceeds to be deposited into a reserve account maintained by ML Wealth LLC and held by Drivewealth LLC, member SIPC and FINRA. The funds in this account will be placed into money market and/or cash sweep vehicles, and may generate interest at prevailing market rates. You will not be able to access the portion of your loan proceeds held in the credit reserve account until you have paid off your loan. If you default on your loan, your credit reserve account may be liquidated by the lender to partially or fully satisfy your outstanding indebtedness. May not be available in all states. Credit Reserve Accounts Are Not FDIC Insured • No Bank Guarantee • Investments May Lose Value. For important information and disclaimers relating to the MoneyLion Credit Reserve Account, see Investment Account FAQs and FORM ADV.
Investment advisory services provided by ML Wealth LLC. Investment Accounts Are Not FDIC Insured • No Bank Guarantee • Investments May Lose Value. For important information and disclosures relating to the MoneyLion Investment Account, see Investment FAQs, Form ADV Brochure, and moneylion.com/investing. Accounts are subject to a monthly account fee of $1, $3 (accounts valued over $5,000), or $5 (accounts valued over $25,000).
Credit score improvement is not guaranteed. Credit scores are independently determined by credit bureaus, and on-time payment history is only one of many factors that such bureaus consider. Your credit score may be negatively impacted by other financial decisions you make, or by activities or services you engage in with other financial services organizations. MoneyLion is not a Credit Services Organization.
Credit score improvement is not guaranteed. A soft credit pull will be conducted that has no impact to your credit score. Credit scores are independently determined by credit bureaus. Data was sourced from credit score data from over 147,500 Credit Builder Plus members with an active loan between January 1, 2020, and March 15, 2023. Credit score improvement is not guaranteed. Credit scores are independently determined by credit bureaus. MoneyLion is not a Credit Services Organization. Credit Builder Plus is an optional service offered by MoneyLion.
Instacash is a 0% APR cash advance service provided by MoneyLion. Your available Instacash advance limit will be displayed to you in the MoneyLion mobile app and may change from time to time. Your limit will be based on your direct deposits, account transaction history, and other factors as determined by MoneyLion. This service has no mandatory fees. You may leave an optional tip and pay an optional Turbo Fee for expedited funds delivery. For a $40 Instacash advance with a Turbo Fee of $4.99, your repayment amount will be $44.99. Generally, your scheduled repayment date will be your next direct deposit date. An Instacash advance is a non-recourse product; you will not be eligible to request a new advance until your outstanding balance is paid. See Membership Agreement and help.moneylion.com for additional terms, conditions and eligibility requirements.
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, MoneyLion does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information. For more information about MoneyLion, please visit https://www.moneylion.com/terms-and-conditions/.