How to Get a Personal Loan to Repair Your Car

When it comes to frustrating events, car trouble ranks somewhere around the top of my list. It is always unexpected – especially if you do not know enough about vehicles to easily feel or hear a change in performance. And I have been through some doozies when it comes to mechanical issues. One year, I had a car actually catch on fire while I was driving. It was an old car that sparked something combustible and just decided it was through.

That is not the only time I have gone without a car – it was just the most traumatic time. Either way, I know what it’s like to have your mode of transportation be snatched away from you. I cannot think of any other time in my adult life that I feel more helpless. Not being able to get around when you need to is a horrible feeling, and you want to do anything to change it, even if it means going into debt. That should be the last resort though not the first choice. Let’s start with something a little less drastic.

Personal Loan to Repair Your Car? Get Some Useful Information

When you are faced with a desperate situation, you are tempted to make desperate choices. Let’s try not to do that just yet. Desperation almost always leads to bad decisions because the problem tends to look worse than it is. When you calm down and the fog clears from your brain, you can make much wiser choices and see wiser solutions. Start by truly assessing the situation. The following questions should help:

What is wrong with the car?

So what is actually wrong with your car? Is it damaged from a wreck? Is the battery dead? Or maybe is your transmission or something totally different? As I always tell my kids, you cannot fix a problem if you do not know what that problem is. The beginning of your evaluation has to be determining what is wrong with it.

The issue with the car will affect how much the repairs will cost, how long it will take to fix, and who is certified to fix it. It also determines if an insurance company is financially responsible for the repairs. If you are lucky, you can find a mechanic that will take a look at your car for free. Or you might be one of the fortunate few that knows their way around a vehicle. Get someone to help you figure out what the problem is- preferably at no cost- so you know which direction to move in.

Is a personal loan really the best or only option to pay for Auto Repair Cost?

It may be tempting to jump up and decide to get a loan so you can get your car fixed quickly, but is it really necessary? Do you have some savings you could dip into instead? Will a family member pay for it and let you pay them back in payments? Getting a loan to repair your car is a big deal. It is a financial responsibility that has the potential to mess up your future if it is not handled correctly. So before you choose to take on this responsibility, be sure that it is your only option in paying for repairs.

How much will it cost to fix?

Auto Repair Loan

New batteries or other minor issues probably will not cost much at all. Small purchases such as these should be easily covered with a paycheck or credit card, if you have one. More serious issues will cost much more. In this case, getting a loan to repair your car might be necessary.

Is it worth the cost to fix it?

Be honest with yourself: is it worth the amount it will cost to fix it? If it is a used car that needs thousands of dollars worth of work, it might be better to count your losses and start working toward a new car, instead. This is obviously a personal decision but try to be logical when making it. If you do not know the value of your car, you can find out through the Kelly Blue Book or something like Carfax.

The vin number should give you all of the information you need about your car. If the value is less than the repair costs, unless you are keeping the car for sentimental reasons, your best bet is to get a new one.

Is there another way to get around for now?

A couple of years ago, our only source of transportation broke down completely, and we have zero public transportation in my hometown. Fortunately, I live within walking distance of the restaurant I worked at the time. When I had to, I would walk back and forth to work, but more often than not, a coworker would bring me home if they knew I was walking. I did that for about three weeks until I could get my truck fixed.

What about you? Is there another way you can get around, even for a short time? Is there public transportation in your area? Do you have a friend or coworker that will get you back and forth in exchange for some gas money? People are more willing to help you out if they know you are not taking advantage of them. Bottom line: if you can find an alternate way, you can save the money you need instead of getting a loan to repair your car.

Where to Get a Loan to Repair Your Car?

If you have decided your only option is to get a personal loan to repair your car, that’s okay. You are not therepair loans first, and you most certainly will not be the last. What is important now is that you find a loan with terms and interest rates that you can easily handle- if at all possible. To do so, you most likely need to emergency repair loan shop.

While you can drive around town- if your car is still driveable- and physically apply in person at multiple places, I cannot imagine a better time to shop online for loans than when your car is in questionable condition. Instead, let Loanry simplify the process. You can find a lender on our site from your couch in your PJs. We do not lend the money ourselves but instead, you find a lender without the hassle.

Types of Loans for Auto Repair

Once you have exhausted every other avenue you can think of, you might only be left with the option of getting a loan to repair your car. If that is the case, you need to know what types are available and which ones to steer clear from.

Emergency Repair Loans

There are loans known as emergency repair loans. This simply means that the lender tries to process your application faster, often as fast as the next day. Thanks to the fast application and processing times, you might get charged a higher interest rate than you would with another type of loan.

emergency repair loans

Payday Loans

I am sure you have heard of them, and yes, payday loans are an option. If you choose a payday loan though, there are a couple of things you need to understand. Most first time payday loan borrowers do not get approved for more than $150, so this probably will not help you much if the cost of your repairs exceeds that amount. Also, these interest rates are very high, so if you must take out a payday loan, pay it back asap.

Title Loans

Title loans are also available, but may not be viable if your car is broken down. Most title loan companies- those that you walk into, anyway- take pictures of your car as part of the application process. If you cannot drive your car, they will likely not approve you.

With online title loans, the requirements may be different but that will depend on the lender. If you do get approved for a title loan, pay it back as quickly as you can, and definitely pay more than the monthly payment. Being committed to a title loan for three years is not something anyone wants to do.

Personal Loans for Auto Repair

I tend to be much more partial toward personal cash loans than any other type of loans. The interest is usually much lower and figured into the payment. You get a longer time frame to pay it off. Generally speaking, they just seem much fairer to borrowers than many other loans- especially payday loans and title loans.

Should You Use A Personal Loan for An Emergency?

Personal loans are designed for long term borrowers. And, unlike title loans-which actually fit the category of short term loan– the monthly payment includes the principle, so it is possibly to actually pay them off without have to eat Ramen noodles and crackers for years to come. If you apply for a personal loan to repair your car and are approved, you receive the loan amount all at once.

If any fees are associated with the loan, such as origination fees, they are usually subtracted from the amount you borrow. The total amount you owe, including fixed interest, is then spread out into monthly payments for the extent of the repayment term. So what exactly are the benefits of getting this repair loan to fix your car?

The benefits

In my opinion, the biggest benefits are the simplicity, the clarity, and that they are designed to be paid off- not keep you in an endless loop of debt. Let’s say you get a $1,000 personal loan to repair your car. The money is then in your possession and you head off to the mechanics shop. The lender gave you a contract that explained exactly how much your monthly payments will be and how long you will pay on it.

The bill for your repairs is only $400, so you have $600 left of the loan for auto repairs. So what do you do? We are going to ignore the temptation to spend for a minute and think about this. There are a few wise options for this extra cash.

The First

One is that you ask the mechanic to go ahead and fix another issue that you know needs to be taken care of soon.

The Second

The second is that you can place the $600 in a savings account with intentions of using it to make your monthly payments. That means it is also there if you need it again. You never know what might pop up next.

The Third

The third is you might pay off another monthly bill whose interest is hurting you. We will use a credit card with a $500 balance for example. The interest is 25% and that is more than you can handle paying on a regular basis, so the balance grows. If you use the additional $600 to pay off that credit card, you are helping yourself in two big ways: you are getting the credit card off of your credit and you are making it easier to repay the personal loan to repair your car. Regardless of how you use it, your monthly payment and terms remain the same.

Personal Line of Credit

A personal line of credit is another fair option, but it works a little differently. With a personal loan, you are given the entire amount upfront, minus any fees. With a personal line of credit, you are approved for a certain amount which is then put it something similar to a savings account. The full amount is available to you if you need it, but you do not have to borrow it all. The interest is only calculated according to how much you have taken out.

A personal line of credit is an excellent loan to repair your car. Quite often, when you start fixing your car, you- or the mechanic- start to notice other things that need to be fixed. I used to hear elder family members joke about car repairs. They would say something like, “I went in for an oil change and came out with a whole new fuel pump.” I know the feeling. Every time I have taken a car in for work, I am given a list of things that need to be fixed. I do not doubt the mechanic’s expertise, but I only have so much to use for repairs. If it is not imperative to get me home that day, it has to wait.

However, You do Not Necessarily Have to Wait!

However, if you have a personal line of credit, you do not necessarily have to wait. So let’s say that you go into a repair shop with your vehicle to get a tune-up and some new wheels. When the mechanic comes to speak with you, he tells you that while putting on your new tires, he noticed that your rotors are worn out. Now, you need new rotors and new brakes. Great. If you have a set amount of money, you might have to wait on at least one of those. Sadly, both are very important but you did not budget for both.

This is when a line of credit comes in handy. Perhaps you withdrew $300 from your $1000 credit line for the tune-up and tires. With the extra work, you might need another $300 or so. No problem, just head back to the bank or your other financial lender and withdraw the extra $300. You can continue to withdraw more money until you reach your credit limit- in this case, that is the $1000. Lines of credit are very helpful when you are unsure of the amount you actually need.

Secured Loans

Another type of loan to repair your car is a secured loan. A secured loan is not necessarily separate from the other loans mentioned. It may just be an additional characteristic, and it just means that the lender needs you to put up some collateral to ease the risk they are taking. Most often, those with low credit scores or unfavorable financial conditions are the ones that need collateral.

Both payday loans and title loans are secured loans, but there are definitely some with less harsh terms. Some financial institutions will use your title as collateral without it being a traditional title loan. The loan itself is actually an installment loan. Your title is just in the financial institution’s hands until you repay the loan. The interest rates with secured loans are often much lower.

Other than vehicles, lenders consider collateral such as real estate property, valuable electronics and jewelry, and even certain types of investments or bank accounts. Lenders have their own guidelines about what they will accept, but the bottom line is that if you default on the loan, they can sell your collateral to recoup their losses.

Steps for the Future

As much as I wish it were, it is just not possible to prevent all future car issues. You cannot control a nail in the road, you cannot control the weather, and you definitely cannot control how other people drive. So it is safe to assume that you will experience more car trouble at a later time. What you can do is minimize your chances of car trouble and decrease the impact it has on your life by following these steps:

Regular Maintenance

Regular oil changes are important- just in case you did not know. I did not get my first car until I was grown, and no one taught me how to maintain one. Not a soul had ever said, “You have to change your oil.” So it was no surprise to find myself sitting on the side of the road with a smoking engine and a six month old baby. To fix my car was going to cost way more than an oil change would have.

Oil changes, tune-ups, and anything else you know you need should be a priority. Ignoring them can cause a lot of trouble. And parents, please do not assume that your children know how to take care of their vehicles. Take the time to teach them, so there is no doubt or confusion.

Emergency Fund

When at all possible, have an emergency fund available so that if you need to make repairs again, you can do it quickly. Experts suggest having 3 – 6 months of expenses put away for a rainy day, but I do not think that car expenses should be calculated in that. I try to keep savings for extra expenses totally separate from savings for regular expenses.

I learned a tip years ago about saving for additional expenses. Though I cannot always follow through, life is much smoother when I can. I have a stack of envelopes that each have their own label such as “Christmas”, “Auto Care”, “Kids’ Birthday”, “Homeschool Resources”, and so on. Every chance I get, I add something to those envelopes. I have apps that I use for cashback on groceries or rewards for surveys.

When I have enough to cash out, I try to spread that amount over all of my envelopes. Sometimes I receive gift card codes to Amazon or Walmart instead of cash. I put those codes into envelopes like “Christmas” or “Kids’ Birthday”. It does not matter if it is $0.50 per week. When the day comes that I need it, like at Christmas or with auto repairs, I am thankful that I have every tiny bit. Give it a try, especially with things such as auto repairs. Find little ways to earn extra and put it away until you need it. You just might be surprised.

While having the cash put away would be better, you might also consider applying for a line of credit before you actually need it. If an emergency occurs, you can then withdraw from your line of credit to make repairs. Knowing that it is available just in case has the power to lighten heavy burdens.

Maintain Insurance

Auto insurance will not necessarily cover all of your car issues, but it will cover some, especially if the problem with your car is due to an accident. Keep your policy paid and up to date. And since insurance premiums tend to fluctuate so often, at least once a year you should shop around for better rates.

Roadside Assistance

Most often, insurance policies come with roadside assistance but sometimes it is an extra expense. However, when I looked into it, it was no more than a few bucks a month. Trust me when I say that you will be glad you spent that money when you are stuck on the side of the road with no one to come help.

Keep a Spare Tire & Some Fix a Flat in Your Car

Last year, my family and I were hit by another vehicle. It destroyed the front drivers’ side tire, so we had to use the spare to drive home. Before I could even get a new tire on the car a couple of days later, another one on the passenger’s side went flat. This time, we did not have a spare available since it was already on the car. The moral of this story is to waste no time replacing tires and be sure you always have a spare- two if you have space. Additionally, keep a can or two of fix a flat in your trunk for really desperate times.

Get a Battery Charger

If you can spare the money, purchase one of those portable car battery chargers. They do not necessarily get your battery back in tip-top shape. But they can get you from a dead battery to home. You might also consider having a battery charger to keep at home. I remember more than one occasion as a child that the car battery would die and my dad would whip out his charger to get us home.

None of these tips will prevent problems, but they can minimize them. Having a flat tire and putting on the spare is no fun, but being stuck on the side of the road without one is much worse. Likewise, paying insurance every month that you do not use feels unnecessary- until you need it. Take care of your car and put these preventative measures in place, and you should bounce back from car disasters much easier.

Conclusion

When you are met with the inevitable headache of car trouble and need some type of repairs, you have a few options. Though a personal loan to repair your car is an option, do not make this decision lightly. Be ready to commit to the loan until it is fully repaid. And, of course, apply only through trusted lenders to prevent any additional headaches, like scams and identity theft. Be wise and diligent in all of your financial decisions.

What is a Secured Loan and Are You Secure?

In the last couple of months, my family has run into what seems like every financial roadblock possible. Though we work hard to keep our heads above water, there are times that there is nothing more that we can do to prevent some financial problems. More times than I care to count, we have found ourselves considering loans and how they might help us improve our lives, even if it is just to ease the burden for a moment.

As much as I wish it were not true, we are not alone. Financial stress and difficult times seem to affect a lot of people, and they always have. Why else do you suppose there are so many available loan options and lenders? It would not be such a large industry if only a few people needed it.

While there is no shame in needing help, loans tend to be a bad move for many people. From my experience, I believe that is because many borrowers do not necessarily understand the loan that they are receiving, do not understand the different loan options, and sometimes because they simply cannot repay it.

At times, borrowers are not even sure what they need to apply for, and this is often due to a lack of clarity on the numerous terms and what all of these loan options really are. I have quite a few friends that have complained that the loan industry is an overwhelming and confusing place. If you have ever tried to navigate it blindly, you can most likely relate.

We want to make sure you have all the clarity you need to make good financial choices, so we put together this little guide on one type of loan that many have heard of but few fully understand secured loans.

Everything You Should Know About a Secured Loan

A secured loan is a loan for which you temporarily trade ownership of something, i.e. collateral, in exchange for the borrowed money. The lender requires collateral for secured loans so that if you do not pay as you should, they have the right to sell your collateral. This prevents them from risking much more than the time it will take to repossess and sell the item.

A secured loan is not always as handy as an unsecured loan, as you will see as you read through this article. They require extra paperwork, extra consideration, and often extra time. In addition, the borrower is not always receiving the full amount of said loan. Secured loans do have their purpose and place though, and they have helped many a borrower improve their financial state. They provide an avenue of borrowing for people whose credit history and score block all other ways.

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What Type of Credit Score Do I Need to Be Approved?

In short, pretty much any score. The beauty of a secured loan is that, generally speaking, your credit will not prevent you from getting approved. While lenders differ in their requirements, your credit score is often one of the lowest factors in a secured loan credit decision. The collateral you can provide and your ability to repay are much bigger factors. If you have some type of collateral that is valuable, which we discuss shortly, you will likely have no trouble locating a lender.

Though it is usually not a big factor in the approval decision, a secured loan with bad credit might affect your interest rate, loan repayment terms, and the collateral required. The lower your credit score, usually the higher your deposit or required collateral. Sometimes, you have to put an equal amount of collateral as what you borrow. For instance, if you get a secured loan through a bank for $500 and your credit is bad, the bank may require you to put $500 in an account that cannot be touched until you pay off the loan.

Secured Loans for Bad Credit: Personal Loans 411

This means that if you are looking to get a loan to actually use for your bills, a secured loan may not be the best option. I mean, if you have to put the entire amount you will borrow up to for collateral, you are basically just swapping the money over. If you can afford to put up that amount of collateral, however, secured loans are a great way to build your credit. Although you have put up collateral, the financial institution will report your payments to the credit bureaus. Additionally, over time, your collateral may be released, or you may be able to take out the same loan without collateral after you pay the first one off.

What Can a Secured Loan Be Used For?

A secured loan is much like any other type of loan when it comes to using it. What you use the loan for is pretty much up to you. However, due to the fact that it is secured, it is best to consider this type of loan solely for the purpose of building credit. While you can use the funds for anything, keeping credit as your main goal is a wise move.

For instance, when I started trying to rebuild my credit a few years back, I was only able to qualify for a secured credit card at the time. Secured credit cards are built on the same principle as secured loans, meaning that they require collateral. I was approved for a $200 limit but had to put a $49 deposit down as my collateral.

In truth, the additional $150 that was left on the card would not go far, especially since they also took out a $39 annual fee. Instead of relying on it for needs, I simply used it as a way to build credit. I would pay the balance in full every month, and then, after the billing cycle closed, I would use the full amount to pay what I could. I would then pay it off before the end of the billing cycle so that I was not paying monthly interest.

Since I only used the card when I had the cash to back my payment, I did not get behind. Instead, this small credit limit helped build my credit up to the point that I could then get a small unsecured loan. Viewing a secured loan as nothing more than a way to build credit should help you use it responsibly instead of getting in any further debt.

What’s the Difference in a Secured Loan and an Unsecured Loan?

Difference Between Secured and Unsecured Personal Loans

The word “secured” has been used in many different ways, so the definition can easily be skewed. The difference in a secured loan and an unsecured loan is very simple: a secured loan requires collateral while an unsecured loan does not. We are going to break this explanation down a bit farther for good measure:

Let’s say your cousin asks to borrow $100 for gas and food until payday. You know his reputation and that he does not normally repay loans. He has done such a poor job with his finances in the past that no one in the family is willing to open their wallets. He has even borrowed money from you before and not paid you back. Logically, you know it probably is not a wise move but you still want to help him out. What do you do?

You could just give him the money, either as a gift or as a loan that you hope he repays. This is an unsecured loan. The other option is that you could say, “Sure, I can help you out. I will loan you $100 but I need to hold onto your laptop until you get paid. When you repay me, you can have your laptop back.” Though you may not want to, if he fails to repay you, you can use the laptop to recoup your losses. This is a secured loan since you are holding ownership for one of his belongings until the loan is paid off.

Special warning

If you were truly offering this secured loan, it would be very smart to get the terms in writing and notarized so you cannot be accused of stealing property. If you are anything like me, you love your family but have learned not to blindly trust them. Always be diligent when it comes to your finances, regardless if you are borrowing or lending.

What Type of Collateral do You Need?

This really depends on the financial institution you are getting the loan from. Both payday loans and title loans are secured loans. With a payday loan, the collateral is the check you fill out and give them. If you do not pay, they can simply deposit the check into their account and get their money back. With a title loan, the title to your vehicle is the collateral. If you do not repay the loan, they have the right to take your vehicle. The are other types of collateral as well such as cars, a home, and more. It is possible to find a loan for pretty much any asset you might own.

Be very careful when taking out this kind of Loan. If you can’t pay it back you risk losing you asset. You need that car to get to work! This is the case with Title Loans.

When A Secured Loan Makes Sense

  • Mortgages are secured given the house is the collateral if you can’t pay back the loan you foreclose and lose the house.
  • Auto loans are secured because like a home loan, if you don’t pay it back, you lose the asset.

There are cases where you can use your asset to get another loan such as a line of credit. You might have property that you do not even realize is very valuable. About five years ago, my husband and I decided to purchase a piece of land and the mobile home that came with it. Looking at this property, we knew it was not worth much, but it was a start in the home ownership path we wanted to take. The plan was to eventually build a house and tear down the mobile home.

Over time, we began to see what a money pit it was and began weighing out our options. We feared that since the piece of land was small and needed a lot done to it that we would never be able to resell it. We honestly assumed that it was worth no more than a few thousand dollars. Then, just last year, I had to gather some paperwork related to my property from the courthouse. To my utter amazement, the stated value on this paperwork was almost six times as much as we believed.

The Moral of This Story is to Never Assume You Have Nothing of Value

I have known people who have discovered many unknown assets. One friend discovered out of the blue that a book he owned for years was actually a very valuable first addition. A friend’s cousin inherited her grandmother’s jewelry. No one else wants the jewelry as they all assumed it was only costume jewelry. They were all surprised that tucked away with that costume jewelry was actually two very valuable rings.

When my grandfather was alive, he ran a truck stop. The items he kept there are now considered “antique”. Though I cannot see anyone wanting an antique icebox, there is a market for those items. For that matter, some very old plates I found at my grandmother’s home turned out to fit into that antique category, as well. Imagine my surprise when I discovered the plates we were eating from were selling on eBay for almost $100 each. Lesson learned: if you own something and are unsure of the value, do your research. You just might be surprised at the amount of valuable assets you own, and most of those can be used as collateral. Speak with your lender to determine acceptable forms of collateral for them.

Benefits of a Secured Loan

We have previously discussed that secured loans can be great for building and improving your credit, but there are a few additional benefits as well. One is that since you are putting up collateral, the lending institution is assuming less risk. This is beneficial because it generally means that the interest rates will be much lower.

Notice I said “generally”. That is because while many loan places do charge lower interest rates for secured loans, that is not always the case. Some actually charge much higher interest, such as title loans and payday loans . If you have never had the misfortune of needing one of these, consider yourself blessed. These are high interest downward spirals that you should avoid as much as possible. There is more detail on these secured loans below.

Other lenders will likely charge lower interest rates, but they will vary from lender to lender. To avoid really high interest rates, simply do research before signing any paperwork. Some other benefits of secured loans are that they are usually easier to get than unsecured loans because it is less of a risk and you can usually get approved for larger amounts.

Risks of a Secured Loan


VIDEO: Title Loan is a Type of Secured Loan

Like all good things, a secured loan has negative sides. First, as there is extra paperwork and assessments needed for the collateral, it may take longer to get approved and receive the funds. Second, as mentioned before, if you are putting cash up for collateral, as in a bank account, a secured loan probably will not be so beneficial for you in regard to bills. Lastly, there is the risk of losing property if you do not pay as you are supposed to. It is best to aim for unsecured loans if those are a possibility for you. If they are not a possibility, be sure that you make timely payments so that you never lose your property.

Terms and Interest Rates

When it comes to the terms and interest rates of secured loans, they can vary as well. Payday loans only give you until your next paycheck to repay the loan. Many payday loans, especially for first time borrowers, do not get approved for much more than $150, though it can go up higher. The highest I have personally seen is $500, but that was after the customer had borrowed money from that lending institution quite a few times. For the $150 payday loan, the interest came to almost $30. For the $500 loan, the interest hit $88. That is about 1/5 of the amount you borrow, which I consider to be a bit high.

Title loans also have high interest raising up into the $100s. However, they have longer repayment terms. In fact, you can literally pay on a payday loan for the rest of your life. The payment the lender requires each month is nothing but the interest, so if you feel like throwing your money away, you can just pay the interest every month. However, that will never touch the principle. If you go in for either a payday loan or title loan, be prepared to make some rather large payments.

On the other hand, there are many other secured loans out there with lower interest rates. In fact, some lenders, such as banks, will also hold your car title as collateral. The difference is the interest rates and the term. With a bank or credit union, the title is literally collateral and the interest on the loan will be about the same as it is for any other loan.

Let’s take an example

For instance, my mother borrowed $2000 from the bank at one point. She used her title as collateral but her payments on that amount came to only $141 per month, and she was to pay for somewhere around two years. This loan was basically a secured personal installment loan for which the interest was added from the beginning. The monthly payments she made were much lower than an actual title loan company charges, and the payment was working on the interest and the principle.

The key to finding a good secured loan comes from doing the necessary research. It is very possible to find a secured loan that offers reasonable interest rates and good payment terms. Often, though, the best ones are not the first ones that jump out at you.

Repaying a Secured Loan

Repaying a secured loan is as important as paying back any other type of loan. Though title loan and payday loan companies do not typically report to credit bureaus, it is not safe to assume that all secured loans are the same. In fact, with most lenders, a secured loan gets reported just as an unsecured loan does. Therefore, you must treat it like any other loan you borrow.

First and foremost, never borrow more than you can repay. Borrowing $1,000 to pay bills will not help if you are adding another bill you cannot afford. My family and I have been in some tight spots over the years. More than once, my immediate inclination was to apply for a loan. The more desperate we were, the more a loan seemed like a good idea. Fortunately, my brain would kick in and say, “If you are already this desperate, how much more desperate do you think you will be when a loan is due next month?” Finding your way out of one problematic situation just to put yourself straight into another one is never a good idea.

So You Absolutely Need a Loan?

If you absolutely need to take out a loan, calculate how much you can afford to repay each month and how long you think you will need to repay it. Be smart about it. Do not take out a short term loan if you cannot afford to pay the full amount back within a month or so, as that is about the length of repayment terms for short term loans. Search for a lender that can provide the monthly payment amounts and repayment terms that you need.

After you have taken the loan out, you should immediately adjust your budget to suit the payments. If you find that you miscalculated and cannot afford the payments, consider picking up some extra shifts at your job, picking up a side job, selling some of your possessions, or anything else you can do to help make the payments.

Also, be sure you as to when you are getting the loan whether there is a penalty for paying it off early. If there is not, consider paying the loan off with your tax refund, a Christmas bonus, or another piece of additional income. The sooner you pay it off the better. Remember that how you treat this loan can and will most likely affect your credit. Do not dig yourself into a deeper hole if you can help it. Be as committed to repaying your loan as you are to make a house payment or car payment.

What Do I Do If I Cannot Repay a Secured Loan?

You took out a loan with every belief that you could pay it back, and you had every intention of doing so. Then, you get blindsided- perhaps you lose your job, an emergency occurs, you get really sick and cannot work for a few weeks, or something else occurs that knocks you down. How will you pay your loan payment? You are already scrambling to pay your rent and buy some groceries. How on earth will you pay that loan payment?

I do not know about you but that scenario sounds awfully familiar to me. Even with the greatest intentions, life can surprise you and take the wind right out of your sails. If this happens to you, start by not panicking. I know that is easier said than done but you cannot think or act rationally if you allow your emotions to control your actions. You can always take a moment to let the emotions roll, of course. You just cannot stay in that place.

Personally, if I am blindsided with something negative, I allow myself to freak out for a day. I usually do not need that long but, in my experience, it is best to let your emotions go crazy for a moment before you try to solve a problem. In my case, within 24 hours or less of my issue, my logical brain kicks back in and suddenly: a.) things do not seem so bad, and b.) a solution seems to pop up out of nowhere.

So if you are facing a crisis, there are a few things I want you to do:

1. Give yourself permission

Especially to freak out- just do not stay in freak out mode for too long.

2. Take a look at your financial situation and assess

Look at how bad it really is. It is usually not as bad as it initially seems.

3. Determine when you can make a payment

Try to find time within a week or two, if at all possible.

4. Call your lender

Burying your head in the sand is not going to solve your problem. Believe me. I have a friend who got a little behind on his loan payment due to a job loss. The lender called continually to see when he could make a payment but he chose not to answer the phone. It was not really that he was ignoring them. He actually had a job interview coming up and wanted to see if he would get hired so he could tell the lender something concrete. Instead, they ended up knocking on his door. From that point forward, he almost could not speak to them anymore about his situation because he had blown their trust in him.

So, again, do not hide. Face it head-on. Call your lender and explain the situation. Also, share your solution with them. If you are having a yard sale over the weekend to make your loan payment, tell them. The more straightforward you are and the more they see you trying, the more likely they are to work with you.

5. After you have given them a date and all the information, do everything in your power to keep your word

Conclusion

Now that you have some 411 on secured loans, you may be asking where to get a loan. As I stated before, there are a lot of secured loan options out there with various requirements, terms, and so on. The best thing you can do is research any personal cash loans available to you to find the pertinent information. If you need the money quickly, refine your research to the term fast loans or quick cash loans. Your research can provide you with the necessary information. However, full disclosure: that research can take a lot of time that you may or may not have.

That is the beauty of Loanry- we have done the research for you. We are connected to a large network of lenders and are dedicated to helping you find a lender that suits your needs. Instead of digging around the internet for hours trying to find a lender, we have provided a platform that makes it easier to get the money you need.