<prompt> Human: I have had a 2005 volvo s40 for the last 3 years. I financed it using a credit union loan for 10,000. I currently owe 5442 left on it and I just blew a rod in my engine and it is currently not running. According to the mechanic it would cost approx. 3100 minimum to replace the engine for my car. Also according to kelly blue book my car at best is worth 2300. I spoke with my bank and I was approved for up to 25,000 at 2.14 but only if I am able to trade in or pay off my car. I dont have any money in savings currently due to the recent birth of my son but my some of my family is willing to loan me some money to help me as well. I am looking for any all advice for this tricky situation. Thanks in advance.  <response>: How is the Volvo otherwise? Has it been rock solid or is this just the latest and greatest repair bill? Does the car fit your needs or would something else be better?I do agree that in general paying for the repair is probably your best option, however if the car has required a lot of repairs already or it doesnt really suit you anymore it would probably be better to get rid of it now before you sink more money into it. I wouldnt necessarily go for a new car with the 25K loan, but rather see what your options would be for rolling the loan into a the loan for a cheaper car or possibly a lease. PF hates these approaches because the average person seeking help has bad credit, very little income, andor huge debts to pay so taking out another bad loan will only make things worse. You may not be in such a dire state and as such you have other options. Youve not stated anything about your income or other debts so its up to you to figure out what makes sense; we cant help without that knowledge.With all that said, you do appear to have fallen into this hole because you lack an emergency fund. Regardless of which approach you take, building an adequate fund will be an essential part of your financial future so make it a priority. 