The Complete Guide to Personal Loans for Uber Drivers
The advent of Uber has made decent-paying work accessible to many who might otherwise struggle to find a job. As an Uber driver, all you need is a car and a license and you can get started earning far above minimum wage.
However, there are costs involved in becoming an Uber driver, especially if you don’t have a car, or if your car needs an upgrade. One way that you can cover the upfront costs of becoming an Uber driver is by taking out a personal loan. This article explores loans for Uber drivers, and which options are best suited for you.
Reasons an Uber Driver Might Need a Loan
One way that Uber differs from other jobs is that you need a piece of equipment, namely a car, that fits certain requirements. Getting the right vehicle can incur substantial costs, as you can see in the section below.
Upgrade Current Vehicle
Uber has certain vehicle requirements that you must meet if you want to qualify for a driving position. First, the car must be less than ten years old. Also, Uber must deem the car as in “good condition,” without any visible blemishes or cosmetic problems. Since this criteria excludes the vehicles of many lower-income workers, prospective drivers must pay to remove damages from their cars, or even buy a new car entirely.
Purchase Car to Become a Driver
Purchasing a newer car is the only option for people who want to become Uber drivers but have cars that are more than 10 years old, or who do not own a car at all. However, many simply cannot afford to cover the cost of a newer car upfront, which is where loans can be helpful.
Loans Available for Uber Drivers
There are multiple loans available for prospective Uber drivers; see the following section for a few options.
Bad Credit Car Loans (Best for Bad Credit)
A bad credit car loan is an auto loan designed for individuals with a relatively low credit score, who might not otherwise qualify. The interest rates on these loans will be higher than a normal auto loan, but the qualifying requirements are much lower. Once you make a certain amount of payments on time, you can refinance your bad credit car loan and obtain regular interest rates.
Secured Car Loans (Best if You Have a Cosigner)
A secured car loan is another option suitable for individuals without the best credit or income. Secured car loans allow you to qualify for relatively low interest rates by using the car as collateral for the loan. Applicants can combine this with a cosigner for a substantially lower interest rate. However, if you miss payments, you may lose the car, which, if you’re an Uber driver, would result in loss of income.
Personal Loan (Best for Immigrants and Visa Holders)
Taking out a personal loan can give you access to larger sums for purchasing a car than a regular auto loan. Many lenders that offer auto loans or bad credit car loans require permanent residency or a Social Security number. Immigrants and visa holders, then, can benefit from a personal loan, since there are lenders which offer personal loans specifically to noncitizens.
How to Get a Loan as an Uber Driver
Applying for a loan is simple and straightforward, and you can receive the funds that you need within a couple of days.
Filling out an application takes only a couple minutes, and involves detailing some important financial and personal information, as well as authorizing a soft credit-pull. If your application meets the minimum eligibility requirements of the lender, then your application will be approved.
Once approved, you will see the range of amounts and loan terms that you qualify for, along with an interest rate. You can choose the amount and term length that best suits your needs, sign a promissory note agreeing to the details of the loan, and the funds will be deposited in your account right away. End-to-end, the process takes as little as 2-3 days, and you will have the funds you need to secure a suitable car for driving with Uber.
Use a Loan to Become an Uber Driver
Once you have the funds in hand, you can take all of the steps necessary to become an Uber driver. See the following section for a breakdown of the process.
Buying a Car with a Personal Loan
First, pick a specific car that you plan to purchase with your car loan, or a couple of cars that you will consider, and note the prices. Make sure that you request a loan amount that will supply you with the necessary funds to purchase this car.
Apply to be an Uber Driver
With your car at the ready, now you can submit an application to Uber. Completing an application with Uber is fairly quick, and you can typically pass the background check and start driving within a week.
Meeting Uber’s Car Requirements
If you qualify to become a driver, you then have to make sure that your car meets Uber’s minimum requirements. The main requirements are:
- A vehicle 10 years old or less
- A four-door vehicle, with seating and seatbelts for 4 individuals
- Vehicle must pass a mechanical vehicle examination
Use Your Uber Income to Make Payments
Once your vehicle is certified and you begin driving, you can start earning substantial income immediately. With this income, you can set up autopay and make payments on your personal loan.
Driving for Uber is an accessible means of income for immigrants and noncitizens, but the main obstacle for many is getting a relatively new and expensive vehicle. Loans for Uber drivers are a solid option for covering this cost. With a new or upgraded car from a personal loan, you can gain access to a huge income opportunity.