Looking to finance a car? Many people buying cars these days are not happy with traditional financing. According to Lab42, two of the top four frustrations for people purchasing a vehicle is spending time on the process and understanding financing.
What if I told you there were faster, easier ways to finance a car? Large dealerships like Ford have begun allowing customers to buy and/or finance vehicles online. There are also crowdfunding platforms where you can finance a car from the comfort of your home! It’s easy to check your rate and you can get the process started in minutes.
Keep reading for more details about these platforms and a few alternative options for anyone who can’t or doesn’t want to get a loan.
Peer-to-Peer Lending
Peer-to-peer lending is the first option. These are platforms that offer loans to borrowers that are funded by groups of investors. These financing options offer better rates, because they operate mostly online and have lower operating costs.
By giving these platforms your business you are also giving a chance for individual investors to potentially earn better returns than they would get by investing their money with a bank or other offline lenders.
Investors earn returns on your loan when you make your monthly payments, but for most of these platforms there aren’t prepayment penalties if you get a chance to pay your loan off early.
The crowdfunding platform is responsible for managing both sides of the process, making it fast and convenient for everyone. Click here to learn more about peer-to-peer lending.
Here are a few popular crowdfunding platforms that allow users to finance a car:
1. Lending Club
Loan amount: Max $40,000
Rates: 5.32% – 30.99%
Lending Club is a crowdfunding platform that connects investors with borrowers looking for personal loans. They have funded more than $24 billion in loans as of December 31, 2016.
You can easily check your rate on their website without it affecting your credit score. All you have to do is enter some basic information like the amount of the loan you are looking for, the purpose of the loan, and your credit score.
The platform also recently introduced an auto refinancing option with rates ranging from 2.29% – 19.99% APR.
2. Prosper
Loan amount: $2,000 to $35,000
Rates: 6.88% to 31.10%
Prosper offers borrowers simple, short-term loans without hidden fees or prepayment penalties. This platform also allows you to check your rate on their website without it affecting your credit score, and it only takes a few minutes.
Prosper offers auto or vehicle loans that are unsecured and have no car eligibility requirements. Once the loan is funded, the money is directly deposited into your bank account. They also have a free app that lets you keep track of your loan and financial accounts in one place.
3. Upstart
Loan amount: $1,000 to $50,000
Rates: 6.37% to 29.99%
Upstart is a platform founded by ex-Googlers that consider more than just your credit score when deciding if you qualify for a loan. They also look at things like your education, field of study, and work history.
You can check your rate on their website in two minutes without it affecting your credit score. Upstart offers loans on three to five-year terms with no prepayment penalties. As of April 1, 2017, Upstart has originated more than 53,000 loans.
Donation Crowdfunding Platforms
Run into some bad luck? Maybe you have a lot going on in your life and for some reason, you can’t afford to make car payments. If you want to finance a car but for some reason have horrible credit, don’t worry. There are other options, but the process could take a little bit longer.
If you can’t get approved for a loan or you think you just don’t need more debt on your hands, there are a few platforms that will let you crowdfund, and save money for a car.
These next few platforms are hybrid and donation crowdfunding platforms. Signing up to use these platforms is easy, but getting donations can be a little bit harder unless you go viral. Get dedicated. Pitch to your friends and family, ask them to share, and share regularly throughout the course of your campaign (just not all day, every day). You can’t just post to Facebook once and expect to get funded instantly.
You can click here to learn more about personal and charity fundraising. Get the free audio book with Audible’s 30-day Free Trial.
Here are a few donation and hybrid crowdfunding platforms you can use to finance a car if debt crowdfunding isn’t for you:
4. BoostUp
BoostUp is a hybrid crowdfunding platform that helps users save for life’s big expenses. Their mobile app lets you set goals and keep track of your progress and their free tool lets you see how saving as little as $1 per day really adds up.
Their platform helps you save your own money but also gives you a chance to crowdfund some of your goal by asking friends and family to donate on special occasions, like birthdays, graduation, and holidays. Signing up for BoostUp is free and they ensure customers that they use bank-level security.
Another thing that makes BoostUp unique is that they have several partners that will match your savings if you spend the money you raise with them. For example, Hyundai matches savings up to $500.
5. GoFundMe
Fees: 5% GoFundMe fee and credit card processing fees
GoFundMe is a personal crowdfunding platform that you can use to finance a car through donations. There are both perks and potential downsides to this option.
The perks are that it’s fairly and you get to keep what you raise apart from a small percentage taken from each donation. As a plus, you don’t need to reach your goal to get what you raise and there are no time constraints or funding limits. GoFundMe’s free mobile app lets you keep track of your campaign from anywhere.
On the downside, since people often use GoFundMe to raise money for charities and emergencies. As a result, some people receive backlash for choosing this option to finance a car, like this teen. Really, how you frame your story has a lot to do with the reaction that you will get.
If you are a genuine person going through hard times and share your story honestly, then people will often empathize and help or share, you just need to get the ball rolling.
I’ve put together a new FREE course that’s packed with GoFundMe tips, resources, strategies, and killer marketing methods.
You should check it out if you want to get more GoFundMe donations and you want to fast-track the entire process.
6. Fundly
Fees: 4.9% Fundly fee and credit card processing fees.
Fundly is a platform that lets you raise money for anything, including a car, and starting a campaign is free. The process is fast and easy and there are no funding requirements or limits.
This platform gives you a mobile friendly donation page with a free iPhone app that helps you manage your campaign on the go. So far, Fundly has helped its users raise more than $330 million in donations for a variety of different causes.
Fundly’s goal is to offer crowdfunding without limits and they offer users support and fundraising ideas to help them reach their goals.
Conclusion
Crowdfunding has created many options for people looking to finance a car, or just about anything for that matter.
Anyone with decent credit can get a good rate a debt crowdfunding platform like Prosper or Lending Club. These platforms make it easy for you to apply online, get a loan fast, and make monthly payments.
For anyone looking for something that is more alternative, donation crowdfunding platforms like GoFundMe, Upstart, and Fundly, and hybrid options like BoostUp will let you raise money to buy a car. These options don’t quite count as traditional financing, but they might help someone in a pinch.
Yes, it’s true, crowdfunding is the best way to help pay for personal expenses. These could include medical bills, emergency costs, and memorial funds. Crowdfunding can also be used to help pay for your education expenses or volunteer efforts. But, that’s not all.
Crowdfunding isn’t just for charity or personal cause campaigns. Believe it or not, more and more newlyweds are turning to crowdfunding to pay for their honeymoon! Some are even using it to pay for travel expenses!
I’m going to guide you through the murky waters and share with you the best techniques, strategies, and give you the inside scoop on some of the crowdfunding platforms or websites out there.
