In this Review..
Upstart has a unique process for assessing risk of their borrowers and approving loans. They use AI to assess their applications. Upstart is a newer company, but is growing fast. Upstart is best for borrowers who have just started their careers and do not have a long credit history or strong income.
Upstart is a new peer-to-peer marketplace with over $2.7 billion in loan originations since 2017. It is based out of San Carlos, CA, and started by former Google employees. “Upstart is an online lending marketplace that provides personal loans using non-traditional variables, such as education and employment, to predict creditworthiness.”
Upstart “identifies high-quality borrowers based on signals of their potential, even if they have limited credit and/or employment experience. We call these consumers “future prime” borrowers.” Upstart claims their AI (artificial intelligence) systems are constantly learning and have instantly approved of 58% of applications.
Upstart is best for borrowers who have just started their careers and do not have a long credit history or strong income.
APR
8.89% - 35.99%
Loan Amount
$1,000 - $50,000
Term
36-60 Months
Min score
620
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 peer-to-peer lenders, 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.
- Not Available in All States – Upstart is not available in West Virginia.
- 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 :
Loan Amount Range | $1,000 – $50,000 |
Interest Rate Range | 8.89% – 35.99% |
Term | 36-60 Months |
Origination Fee | 0% to 8% |
Late Payment Fee | 5% of past due amount or $15 (the greater) |
Check Processing Fee | None |
Prepayment Fee | None |
Minimum Credit Score | 620 |
Minimum Annual Income | $12,000 |
Dept to Income Ratio | Less Than 45% |
Funding | 1-2 Days |
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.
Application Process
- 1.
The Upstart application process only takes a few minutes.
- 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.
Upstart is best for borrowers who have just started their careers and do not have a long credit history or strong income.
APR
8.89% - 35.99%
Loan Amount
$1,000 - $50,000
Term
36-60 Months
Min score
620
Alternatives Lenders For Consideration
Here are our 3 choices of lenders which can use as a great alternative to Upstart personal loan:
- LightStream Personal Loan
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 Personal Loan
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 Personal Loan
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.
