Short answer: get a written estimate first, then compare what each way of paying adds to the bill. On the $1,200 example below, a no-interest payment plan from the shop adds nothing, a personal loan or credit card adds roughly $78.72 to $150.24 over a year, and a title loan renewed a few times can add as much as the repair itself. Avoid putting your car up as security to fix it.
Before you pay: the estimate
The FTC says to get a written estimate that names the problem, the parts and the expected labor charge, and says the shop will contact you for approval before doing work over a set amount of time or money. Ask for your replaced parts back; state law may require the shop to return them. Keep records of dates, costs and names in case of a dispute (FTC). A smaller, accurate bill is the cheapest financing there is.
The options, on a $1,200 repair
Example only, our calculation. Loans and the card are repaid in 12 equal monthly payments, interest counted monthly. Rates: the Federal Reserve's August 2026 averages for commercial bank credit card accounts that paid interest (22.36%) and 24-month personal loans (11.90%) (Federal Reserve G.19); your rate depends on your credit and the lender. The PAL row uses the 28% cap (NCUA) and the $20 maximum application fee (12 CFR 701.21(c)(7)); the cash advance row uses the 5% fee and 30% rate most common in card agreements the CFPB reviewed (CFPB); the title loan rows use the FTC's 25% monthly fee example (FTC).
| Option | Monthly payment | Total paid | Added to the bill |
|---|---|---|---|
| Shop payment plan, no interest, 6 months (if offered) | $200.00 | $1,200.00 | $0.00 |
| Personal loan at 11.90% APR | $106.56 | $1,278.72 | $78.72 |
| Credit card at 22.36%, paid in 12 equal payments | $112.52 | $1,350.24 | $150.24 |
| PAL at the 28% cap, plus a $20.00 application fee | $115.81 | $1,409.72 | $209.72 |
| Card cash advance, 5% fee, 30% APR | $122.83 | $1,473.96 | $273.96 |
| Title loan, 25% monthly fee, repaid after 1 month | One payment | $1,500.00 | $300.00 |
| Title loan, renewed 3 times, repaid after 4 months | Fees each month | $2,400.00 | $1,200.00 |
Loan payment: P x r / (1 - (1 + r)-n), r = APR / 12, rounded to the cent. The cash advance fee is added to the balance first.
What each option means
- Shop payment plan. Ask the shop whether it will split the bill, and get the amount, dates and any fee or interest in writing. Some shops offer financing through a store card or a lender instead; that is credit, so read whether it charges deferred interest.
- Credit card. If you pay a repair with a credit card and cannot resolve a dispute with the shop, you may be able to raise it with the card issuer and hold back payment of the disputed amount, if the charge was over $50 and made in your state or within 100 miles of your billing address (12 CFR 1026.12(c)). Paying only the minimum makes the cost far higher than the table shows.
- Credit union PAL. Federal credit unions can make small payday alternative loans to members. How they work and who can get one is in payday alternative loans.
- Personal installment loan. A fixed payment and end date; check the APR and total of payments on the disclosure (how to read a loan disclosure).
- Card cash advance. Only useful if the shop does not take cards, and it costs more than charging the card. See cash advance vs personal loan.
- Title loan. You pledge the car you are trying to fix. Rollovers and repossession risk are covered in car title loan risks.
If you need the car to keep your job
Ask the shop which repairs are needed now for safety and which can wait, and get the estimate split that way. Then see help with an emergency expense without a loan for options beyond borrowing.
Start your loan request How our service works
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.
Sources
- FTC: Auto Repair Basics
- Federal Reserve: G.19 Consumer Credit (released October 7, 2026), terms of credit, August 2026: credit card plans and 24-month personal loans
- MyCreditUnion.gov (NCUA): Payday Alternative Loans
- eCFR: NCUA rule 12 CFR 701.21(c)(7), payday alternative loans (PALs I and PALs II)
- CFPB: Data Spotlight: Credit card cash advance fees spike after legalization of sports gambling (December 16, 2024)
- FTC: What To Know About Payday and Car Title Loans
- Regulation Z, 12 CFR 1026.12(c): your right to assert claims and defenses against a card issuer