Why would you consider one? It can happen to any of us. Our car or truck breaks down when our finances are pushed to the limit. Our credit cards or lines of credit are maxed out. Yet the thought of taking our vehicle off the road - that same vehicle that often helps us earn a living—makes no sense. So what can we do when faced with costly repairs that can overwhelm us financially?

Today there are vehicle repair financing companies that can help. If there is a transmission problem—a problem which can easily cost thousands of dollars—a car repair loan can help pay for the repairs, allowing the borrower to get his or her car back on the road quickly. These loans are offered specifically to those with no credit, bad credit, or those who simply don't have the option of increasing their credit; consequently, the borrower's vehicle itself is used as collateral. The vehicle remains in the borrower's name at all times, unless the borrower defaults on the loan, at which point the vehicle's ownership is transferred to the lender.

The vehicle repair industry is a relatively new industry, so finding a lender may be difficult, but not impossible. And some lenders may have some basic requirements. They may only lend in cases where the vehicle is less than 8 years old, has a clear title and is fully paid for. They may also require that the vehicle be insured, including collision and comprehensive coverage. Finally, they may also require that the borrower have a steady income. For those who need their vehicles either for their work or to get to work, a car repair loan can be a lifeline.

However, before you decide to borrow, make sure that the lender you choose is a reputable one. Check with the Better Business Bureau, or a similar entity, to make sure they have no outstanding complaints against them. Also, check the conditions of the loan carefully. You don't want to find yourself in a cycle of only paying down the interest without making any significant reductions in the actual amount of the loan.

As with all loans, car-title loans should not be taken lightly. They should be used by those who are unable to seek financing through typical financial institutions. Payments must be made on time and in full or the borrower risks either having an increase in the interest charges, or worse, losing their vehicle. Finding the right lender is important to ensure you have a good loan experience.