Finance Options For Lyft & Uber Drivers

A rapid increase in the use of ridesharing apps like Lyft and Uber has provided many job opportunities for individuals who want to generate an income according to their own schedule.

The best part? These individuals only need a valid driver’s license and a car to begin earning some money!

Unfortunately, there are a couple of expenses associated with the role, and the upkeep of a vehicle according to company standards and policies can be a little costly. This is when Lyft and Uber drivers may want to consider outside income sources to supplement their job, such as a payday loan for Lyft driver.

Here are some other finance options to consider.

Why Rideshare Drivers Require Financing

These are three of the most common reasons why a Lift or Uber driver may require additional financial assistance:

For Emergency Funds

Being a driver for Lyft or Uber generally comes with a good financial package, yet the job doesn’t come without its own set of major expenses. For example, owning a car that can then be used to carry out journeys can work out to be pretty expensive.

If you consider the cost of car upgrades and maintenance, gas, parking fees, and accessories, the money can quickly add up to become an unmanageable sum!

Debt Consolidation

This is a common strategy to pay off debts through a single financing solution. It’s an ideal solution that helps borrowers to repay a loan amount in full. For a rideshare driver that may have balances with interest rates, debt consolidation might be a good idea.

Buy A New Car

Using a loan to buy a new car can be a good way of solving a pretty big issue. After all, having a quality car is an asset as a Lyft or Uber driver. Taking out a loan allows drivers to have a solid source of income without needing to use up their savings, or fork out hefty upfront payments.

Do They Qualify For Loans?

The simple answer is yes, Lyft and Uber drivers can qualify for certain loans.

Unfortunately, unlike entrepreneurs, Lyft and Uber drivers may find it more difficult to qualify for any sort of loan. This is largely because of the unpredictability of the rideshare industry, strict documentation requirements, a poor credit history, and even employment status.

Types of Loans Available

There are a few different types of loans available for Lyft and Uber drivers to choose from and apply for, depending on the specific circumstances. We’ve outlined some of the most appropriate options below.

Payday Loans

One of the main buffers to ensure that a car stays in peak condition is a payday loan. Though it may be a convenient solution if they are in a real fix, it often comes with higher interest rates which may make repayments far more expensive than they need to be.

Secured Loans

These have lower interest rates in exchange for types of collateral items. It’s one of the greatest types of loan that a Lyft or Uber driver can obtain, and is good for improving credit scores. Yet if a loan is not repaid on time, the car may be lost as collateral.

Unsecured Loans

This is another good option for Lyft and Uber drivers to consider but is much harder to qualify for than other types of loans. If they do not want to put their car up as collateral, this is a great alternative.

Bad Credit Loans

If rideshare drivers have a bad credit history and aren’t eligible for any secured loans, this is a good alternative. However, it has stricter repayment terms and much higher interest fees as they are more of a risk for lenders.

Credit Cards

This is the best option for Lyft and Uber drivers looking to finance some bills now and then. They’re a pretty straightforward route to a credit line that can be used to make purchases for the car, buy gas, and even pay for necessary repairs. However, they must pay off the minimum amount before the delegated due date.

Personal Loans

Lyft and Uber drivers can apply for personal loans in any situation. If they’ve got collateral or decent credit, they may receive much lower rates on the loan that they get. Whether they’re wanting to finance car repairs or buy months of fuel for the car, a personal loan can be a pretty useful tool!

Other Financing Options to Consider

Instead of resorting to quick cash loans or payday loans that come with high-interest rates and fees, here we’ve listed the different alternative funds drivers can apply for.

Line of Credit

Sometimes a borrower doesn’t need to take out a loan but still doesn’t have enough money if an emergency was to crop up. This is where a solid line of credit will come in handy. It provides Lift and Uber drivers with a comfortable cushion of funds to cover maintenance costs and any other relevant purchases.

Cash Advance

If a Lyft or Uber driver has bad credit, a cash advance may be the way forward. It’s not a loan but is instead a calculated amount of cash that is granted to the driver depending on all of their future earnings.

Alternative Small Business Lending Platforms

There are many companies out there that might be willing to offer more suitable loans to smaller businesses operating in the economy, such as Lift and Uber drivers.

Depending on which lender they choose to go with, the drivers might be able to receive a loan of $10,000 and a further $15,000 as a line of credit.

These lenders typically charge higher interest rates which can set anyone back into a worse financial position.

Summary

There’s no questioning the fact that being a Lyft or an Uber driver can be quite an expensive task sometimes. Fortunately, drivers no longer have to fork out money from their pockets to cover work-related expenses. This is because there are plenty of appropriate financial alternatives.