The dashboard light glows, a sinister amber eye in the dim twilight of your commute home. It’s not the friendly reminder for an oil change; it’s the "check engine" light, followed shortly by a strange knocking sound from under the hood. Your stomach sinks. In the current climate of global economic uncertainty, supply chain disruptions, and persistent inflation, a major car repair isn't just an inconvenience—it's a potential financial crisis. For many Americans, the car is not a luxury; it's a lifeline to their job, their children's school, and the grocery store. When it breaks, the pressure to fix it now is immense.
This is where companies like Avant step in, offering personal loans marketed as a quick and accessible solution for exactly this kind of unexpected expense. An Avant loan can feel like a lifeline thrown to a drowning person. But before you reach for it, the critical question demands an answer: In today's complex financial world, should you actually borrow money for car repairs?
We are navigating a perfect storm of financial pressures. The rising cost of living has stretched household budgets to their breaking point.
Remember when a brake job cost a few hundred dollars? Today, the same repair can easily run into the thousands. Inflation has driven up the cost of parts and labor significantly. Compounding this is the lingering effect of global supply chain issues. A simple sensor or microchip needed for your car's computer might be on backorder for weeks, forcing you into a rental car and amplifying the total financial blow. Your emergency fund, if you had one, might no longer be sufficient to cover these inflated costs.
For a growing segment of the workforce—rideshare drivers, delivery couriers, and other gig workers—their car is their direct source of income. A single day off the road means a direct hit to their earnings. For them, a loan isn't just about mobility; it's about business continuity. The calculus changes from "Can I afford this loan?" to "Can I afford not to get this fixed immediately?" This urgency can lead to decisions that are financially suboptimal in the long run.
Avant is an online lending platform that specializes in personal loans for borrowers with fair to good credit (typically FICO scores between 600 and 700). They position themselves as an alternative to traditional banks, which often have stricter credit requirements and slower approval processes.
This is the most critical part. Because Avant serves a riskier segment of borrowers, their Annual Percentage Rates (APRs) are generally higher than what you'd find at a credit union or for a borrower with excellent credit. APRs can range from around 9.95% to a steep 35.99%. The rate you receive is entirely dependent on your creditworthiness. An APR at the higher end of this spectrum can add a significant amount to the total cost of your repair.
Borrowing money for a depreciating asset like a car repair is rarely ideal, but in certain scenarios, it can be a rational, if not the only, choice.
Your car is reliable, well-maintained, and has low mileage. A single major repair, like a transmission issue, threatens to sideline it. The cost of the repair, even with a loan, is substantially less than the cost of buying a new or used car in today's inflated vehicle market. In this case, taking a loan to preserve a valuable asset can be a smart financial move.
As mentioned earlier, if your car is essential for you to earn a living and you have no other way to get to work, a short-term loan can be a bridge to financial stability. Missing work could mean lost wages, which could lead to even worse financial consequences, like being unable to pay rent. Here, the cost of the loan is weighed against the cost of lost income.
You've exhausted all other options—no emergency fund, no ability to use a credit card with a lower APR, no help from family. The repair is essential, and the monthly payment Avant offers you fits comfortably within your budget without forcing you to sacrifice other essential expenses like food or utilities. If you can secure a rate on the lower end of Avant's spectrum, it becomes a more palatable tool.
The ease of clicking "apply" can obscure the long-term commitment you're making. Here are the significant downsides you must consider.
You take out a $3,000 Avant loan for a new transmission. The monthly payment is $150 for three years. Six months later, another major part fails. Now you're still paying for the first repair while facing a second financial crisis. This is how people get trapped in a cycle of debt, using new loans to pay off old ones, with the compounding interest slowly choking their financial health.
Let's use a real example. You borrow $4,000 at a 28% APR for a 3-year term.
That $2,000 is money that could have gone into your retirement fund, your child's education, or simply towards building a better emergency fund. The high cost of borrowing can set your long-term financial goals back by years.
Sometimes, the most financially sound decision is the hardest one to make. If your car is old, has high mileage, and is known for being unreliable, pouring thousands of dollars into it—whether from savings or a loan—is like throwing money into a hole. You might fix one issue only for another to appear next month. In this case, taking on debt to repair a terminal asset is a poor financial decision.
Before you fill out that application, walk through this checklist.
Get a precise diagnosis and at least two or three written estimates from reputable mechanics. Don't just accept the first number you're given. The problem might be less severe than you fear.
Be brutally honest with yourself.
This is a crucial rule of thumb. Is the cost of the repair more than half the current market value of your car? If your car is worth $3,000 and the repair is $2,500, it's almost certainly time to start thinking about a different vehicle rather than sinking that much money into it.
If you've decided borrowing is your only viable path, don't stop at Avant.
The best way to handle a car repair emergency is to not need a loan at all. This is a long-term game.
Even a small, automatic transfer of $50 or $100 from each paycheck into a separate savings account can build up over time. This fund is specifically for car repairs, maintenance, and new tires. It turns a catastrophic $1,500 expense into a manageable draw from a dedicated account.
The cheapest repair is the one you never have to make. Adhere strictly to your car's maintenance schedule for oil changes, fluid flushes, and tire rotations. Catching a small problem early can prevent it from becoming a multi-thousand-dollar catastrophe.
Using debt for an emergency can be a tool, but it should not be the default. View it as a strategic, one-time intervention, not a recurring crutch. The goal is to use this experience as a catalyst to build your savings and improve your credit, so that if an emergency happens again, you have better, cheaper options available to you. The path forward isn't just about fixing your car today; it's about ensuring you're not in this same vulnerable position tomorrow.
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Author: Personal Loans Kit
Link: https://personalloanskit.github.io/blog/avant-loans-for-car-repairs-should-you-borrow.htm
Source: Personal Loans Kit
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