In this Review..
Upstart is different from its competitors in that it uses an AI system to screen for credit rather than the typical FICO score ratings. They were the first company to receive a No-Action Letter from the Consumer Financial Protection Bureau, which is meant to reassure consumers that Upstart practices are completely safe.
The quick turnaround times and modest income requirements make this lending option a popular choice among many. Upstart doesn’t charge a processing fee and borrowers aren’t penalized for making prepayments either. They also offer quick turnaround times and use soft pulls for all applicant inquiries.
The minimum income requirement for borrowing with upstart is $12,000 and anyone with a credit score of at least 580 is likely to get approved. With Upstart, you have the ability to borrow between $1,000-$50,000.
Despite these clear benefits, Upstart may make some hesitate because they’re a newer company and don’t have much reputability. They charge higher interest rates than other companies, even on those with excellent credit and they don’t allow joint borrowers either.
Upstart is best for borrowers who have just started their careers and do not have a long credit history or strong income.
Typical APR
8.27% - 35.99%
Loan Amount
$1,000 - $50,000
Term
36-60 Months
Min score
580
Upstart Loan Pros & Cons
As we know, each lender has its own pros & cons – here are the relevant things we found for potential borrowers:
Pros
- Soft Pull Inquiry – Upstart allows for an initial soft pull inquiry online so the borrower can get an idea of the options for which they may qualify. A soft pull does not affect your credit.
- Good for Borrowers with Limited Credit Histories – Upstart is good for borrowers who may not have long credit histories. Most lenders prefer to lend to borrowers with long credit histories because they are considered less risky.
- Modest Income – Many personal unsecured providers have higher average incomes than Upstart borrowers. So borrowers that have lower or modest incomes have a good chance of getting approval through Upstart.
- Quick Turnaround Times – Upstart has a quick process and an easy application. Many borrowers are approved with money in their account by the end of the next business day. Unlike other enders, Upstart will approve the loan without waiting for investors to invest or fund the loan.
- Flexible Repayments – You can customize your repayments. You can choose a payment due date and schedule your payments every other week, or monthly. Upstart will work with borrowers who fall behind on payments.
- No Prepayment Penalty – Upstart does not have a prepayment penalty
- No Processing Fee – Many personal loan providers charge for processing a check, Upstart does not.
Cons
- Higher low end rates for those with excellent credit – Borrowers with excellent credit can often find lower rates in the marketplace.
- Origination Fee – Upstart deducts a one-time origination fee of 0% to 8% of your loan amount directly from your loan funds. Upstart has one of the highest origination fees when compared with other lenders. This should be considered in the pricing of your loan when you apply.
- No Joint Applicants – The application is based on the applicant alone. Upstart does not allow for joint applicants.
- High Interest Rates – Upstart has higher interest rates for borrowers with good credit. There are many other personal loan providers that have lower rates for borrowers with excellent credit.
- New Company – Upstart is a new company that does not have a long track record of success.
Loan Details
Here are the basic specifications & requirements of Upstart Personal Loan :
What Can a Upstart Personal Loan Be Used For?
Upstart loans can be used for many different things. They do not provide upfront much information about what their loans can be used for, but they do provide a short list of items.
For example, Upstart can be used to refinance credit cards, other debts, and even student loans. Many providers do not allow their personal loans to be used for refinancing student loans or for post-secondary education, but Upstart allows for both.
Upstart loans can be used to pay for personal expenses. The items listed on Upstart include paying bills including rent and medical bills, home improvement costs, moving costs, taxes, vacations or wedding expenses.
They can also be used to buy a car or for other large purchases. Upstart loans can also be used to expand or start a business.
Upstart: How to Apply For a Loan?
- 1.
The Upstart application process only takes a few minutes. In the first step, you should set your requested loan amount and choose loan purpose.
- 2.
You will fill out a short form with some basic questions about yourself, including your full name, contact information, date of birth, employment status, education, how much you have in savings, income, and preferred form of repayment.
- 3.
This form is for a soft pull, meaning the credit inquiry will not affect your credit.
- 4.
You will get to see what your rate would be if approved. You will review the terms and conditions.
- 5.
Then if you want to move forward, you may need to provide some verification of items stated on the application such as your picture ID, social security card, bank statements, pay stubs, copy of college transcripts or diploma, or tax returns.
Best Egg FAQs
Upstart allows you to borrow for a variety of purposes. You’ll need to meet a minimum credit score and other requirements to qualify for a loan.
The typical rates range are reasonable, particularly if you have a fair or good credit score, and you can expect to receive your funds approximately one day after application approval.
Upstart needs to verify your income to approve any loan application. By providing your financial account details, you do give Upstart authority to retrieve information maintained online by your bank, including your transaction history. While this may seem intrusive, it does allow for quicker processing, so you can get your loan approved as quickly as possible.
Like Upgrade, Upstart aims to process loan applications quickly and can release funds in approximately one business day. Upstart also offers similar loan amounts but is a little less flexible in its requirements, as you need to show that you are in full time employment or have another source of regular income.
Another point in Upgrade’s favor is that Upstart’s rates start at a lower APR, so if you have decent credit, you will pay more with Upstart.
Like Upstart, Citibank offers similar maximum amount loans and can offer more attractive rates. However, in order to access a Citibank personal loan, you need to be an existing customer and have an established relationship.
It is this relationship that allows Citibank to assess risk and therefore can offer a lower rate. Unfortunately, unless you have the time to open an account and create a positive history with Citibank, Upstart is likely to be a better option.
While Best Egg does have a solid reputation in the online lending industry, you can only borrow a lower maximum. The typical rates are slightly lower.
Like Upstart, you will need at least fair credit to qualify. You can use your loan for credit card refinancing, consolidating debt or for a large purchase. However, the application process is slightly longer than Upstart. Best Egg typically requires up to three days to process an application and approve a loan.
Upstart does allow personal loans for various purposes with a reasonable credit score. However, you must be in full time employment or have another source of regular income to qualify.
Another advantage Upstart has over Payoff is that you can expect to receive your funds as quickly as one day after approval, although there is a three business day hold for educational loans.
So, unless you are looking to consolidate, Upstart is likely to be the better option for you.
Upstart has a higher borrowing limit compared to Discover. You can also use the loan for a variety of purposes. Another key difference is the rates, which are far higher compared to Discover.
Upstart requires a credit score of at least 600, so it is easier to qualify for a loan, but you do need to demonstrate that you have a regular income or are in full time employment.
Upstart can also deliver approval and your funds within one day. So, if you are in need of a quick loan and don’t have a great credit rating, Upstart is likely to be the better choice.
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Learn more about how we review products and read our advertiser disclosure for how we make money. All products are presented without warranty.
This website is an independent, advertising-supported comparison service. The product offers that appear on this site are from companies from which this website receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This website does not include all card companies or all card offers available in the marketplace. This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval.
This allows us to maintain a full-time, editorial staff and work with finance experts you know and trust. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impacts any of the editorial content on The Smart Investor. While we work hard to provide accurate and up to date information that we think you will find relevant, The Smart Investor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof.
Learn more about how we review products and read our advertiser disclosure for how we make money. All products are presented without warranty.
Alternatives Lenders For Consideration
Here are our 3 choices of lenders which can use as a great alternative to Upstart personal loan:
- LightStream
This company is an online lender that offers very high loan amounts yet at low interest rates. LightStream is part of the Trust Bank group, formerly the SunTrust Bank. You can use the loan for any purpose, including home improvements, debt consolidation, etc.
LightStream does not charge fees. So, there are no late payment fees, processing fees, or pre payment fees. They even offer $100 to customers if they are unsatisfied with their loan processing experience and are willing to beat competitor’s rates by 0.1%.
If you find a lender offering a better rate than LightStream, the company will offer you a 0.1% decrease to highlight that they are a better option.
Most of the loans have a term of two to seven years, but this may be extended to 12 years for solar financing, home improvement loans, or swimming pool loans.
- OneMain Financial
This lender is a good option for those with poor credit. Borrowers can use OneMain loans for any purpose, including debt consolidation, home improvements, buying a car, weddings, or personal expenses.
You can apply online or connect to a live loan specialist for a more personalized experience. OneMain also has brick and mortar branches throughout the country.
Loans are accessible to all, regardless of background, but if you have a better credit score, you’re likely to access better rates.
The company also offers fast loan processing. You may receive your loan approval within 10 minutes, with funds deposited in your bank account the same day.
OneMain also offers secured loans. These require security, but they are lower risk, so they offer lower APRs and may be an option for those struggling to qualify.
- RocketLoans
Rocket was founded to offer a rocket fast loan processing system to provide personal loans to eligible borrowers. Rocket is part of the Quicken group, which includes Rocket Mortgage and Rabid Advance.
Qualifying for a Rocket loan is contingent on creditworthiness rather than business type. You can use your loan for any purpose, including starting a business.
However, Rocket only qualifies people with a credit score minimum of 640 and a good credit history. You also need to have a permanent source of income and a low debt to income ratio.
Where Rocket stands apart is that loans are processed very quickly. 85% of borrowers receive loans within a day.
Upstart Reputation
- A+ on BBB: BBB assigns ratings from A+ (highest) to F (lowest). BB ratings are based on information in BBB files with respect to factors such as the business's complaint history with BBB, type of business, time in business, transparent business practices, and more.
- 4.9/5 on Trustpilot ( +6800 reviews): TrustScore is also an overall measurement of reviewer satisfaction, represented numerically from 1 to 5.
- 848/1000 points on J.D Power: Upstart got 848 out of 1000 possible points in the 2020 research, lower than industry average. .J.D Power offers the most comprehensive and independent study of personal loans consumer satisfaction . The study aims to help consumers and issuers to understand user opinions and ratings of top lenders. It covers terms, benefits, services, communication, transparency and more.
Disclosure
Loan amounts – Your loan amount will be determined based on your credit, income, and certain other
information provided in your loan application. Not all applicants will qualify for the full
amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in
MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount
in NM is $5100. The minimum loan amount in GA is $3,100
APRs, Loan term – The full range of available rates varies by state. The average 3-year loan offered
across all lenders using the Upstart platform will have an APR of 25.79% and 36
monthly payments of $37 per $1,000 borrowed. There is no down payment and no
prepayment penalty. Average APR is calculated based on 3-year rates offered in the
last 1 month. Your APR will be determined based on your credit, income, and certain
other information provided in your loan application. Not all applicants will be approved..
