Loans for Lyft Drivers
If you are a Lyft driver, you’ll likely agree that securing a loan is tough. Luckily, there are ways those difficulties could be mitigated. This article talks about various ways in which Lyft drivers can obtain a loan easily and securely. Read on to learn more!
Reasons a Lyft Driver Might Need a Loan
As a Lyft driver, you’re considered an “Independent Contractor.” That means you’d need to incur all the costs associated with being a contractor. One of the main criteria includes having your own vehicle. Running or maintaining a vehicle is expensive over time, let alone easy. It requires spending money to keep it in a healthy state and functioning. Below are the two main reasons we see Lyft drivers seeking a loan.
Maintain and Update Current Vehicle
As mentioned earlier, an automobile is something which calls for maintenance every now and then, irrespective of whether you use it or not. Most Lyft drivers work full time which can stretch to many hours in a row. This translates to many hours of work for the vehicle. So, needless to say, you’ll need to do some tuning for it to work smoothly.
Moreover, Lyft has certain requirements which vehicle owners need to meet to be eligible as a driver on its platform. The car being driven should not be more than 10 years old. Second, the interior should be clean with no visible blemishes or cosmetic tampering. On top of that, each state has its own regulatory requirements that commercial vehicles must comply with. All of these require money now and then.
Purchase Car to Become a Driver
For every car owner, a time will come when tuning and upgrading their car becomes no longer viable. In such cases, purchasing a new car is the best and sometimes only option. As per the Lyft requirement, the car shouldn’t be more than 10 years old. So you have to purchase either a used car that is less than 10 years old or purchase a brand new one. For many drivers, the latter option appears far more appealing. That’s why they take out an auto loan to purchase the most suitable car model for them.
Loans Available for Lyft Drivers
When taking out loans for either upgrading your old car or buying a new one, you need to know all the options. Here are some of the best options we’d recommend for Lyft drivers:
Secured Credit Card Loans
This is by far the best type of loan you can obtain as a Lyft driver. These types of loans come with low interest rates in exchange for collateral. To obtain even lower rates, you can apply along with a co-signer. Secured loans are mostly provided to drivers with a good credit score. But a thing to note here is that if you fail to repay the loan, you might lose your car if it is part of the collateral, which in turn will make you jobless.
Bad Credit Card Loans
If you have a less than stellar credit history and you’re not eligible for collateralized loans, you can opt for bad credit card loans in which case you’d need to incur higher interest fees and go through stringent loan policies. Once you start making payments on time for months in a row, you can expect your rates to go down and refinance your loan.
Lastly, you have the option of going for a personal loan. In the previous two cases, the loan was being borrowed against your credit card. But in this case, you can apply for loans based on your permanent residency status. Therefore, this is likely the best option for immigrants and visa holders who don’t have a good credit score and are turned down for various reasons.
How to Get a Loan as a Lyft Driver
Getting a loan as a Lyft driver is super easy and can be processed within a few days. First, you need to decide which type of loan you want to apply for. Then get in touch with a well-regarded financial institution and fill out an application form. You’ll be asked to provide personal and financial information in the form. Based on the information provided, your loan application will either be approved or rejected.
If approved, you’ll receive a confirmation and the amount will be credited to your bank account. Most institutions immediately set up an auto-pay which will automatically deduct money from your account at the end of the month to pay off the loan.
Use a Loan to Become a Lyft Driver
If you’re using the loan amount specifically to work as a Lyft driver, then here’s how you can go about it:
Buying a Car With a Personal Loan
First, get in touch with a car dealership before you take out a loan. This will serve two things. First, you’ll get a better understanding of the car you want to buy and which one will be right for your needs. Car salespeople will often guide you in this regard. You’ll also learn the exact amount you’d need for purchasing the car.
Second, you’ll also come across some curated offers which the dealership may provide to you. Most, if not all, car dealers closely work with loan providers to offer you loans at competitive rates which you otherwise might not come across. Therefore, you can visit a few car showrooms to learn more about your options.
Apply to Be a Lyft Driver
Once you’ve purchased out a car of your preferred choice, you need to apply to Lyft to become one of its drivers. This is straightforward and requires an application with some formal background verification. You can sign up online and provide the required details there.
Meeting Lyft’s Car Requirements
Not only you, but your car needs to go through a requirement check to become a Lyft vehicle. If you’re taking out a brand new car, this will be like a walk-in-the-park kind of thing. Just make sure all the paper work is in place. Other requirements like having a 10-year old car or newer, four-doors with a seatbelt, and mechanical health will already be taken care of.
Use Your Lyft Income to Make Loan Payments
Finally, you can start driving your car and getting riders via the Lyft platform. Make the loan repayments with your Lyft income and within a few years, you’ll be out of debt.
Lyft has certainly made life easier for both drivers and passengers. With more innovation happening in the shared economy space, you can expect things to get better for you and everyone else.
Driving for Lyft is an accessible means of income for immigrants and non-citizens, but the main obstacle for many is getting a relatively new and possibly expensive vehicle. Loans are a solid option for covering this cost. With a new or upgraded car obtained because of a personal loan, you can gain access to a huge income opportunity.