Upstart is a peer-to-peer online lending platform that offers personal loans to qualified borrowers with fair credit scores. They look at more than just your credit score to determine if your loan application can be approved. Upstart serves all 50 states except Iowa and West Virginia.
They also utilize your education and experience during the approval process. With flexible terms and loan amounts with no prepayment penalty, Upstart is a great fit for many applicants.
With Upstart, you can check your rate without impacting your credit score. Upstart reviews more information beyond your credit score to set the loan rate. So, you may get a better offer compared to traditional lenders, and that you can save money over the term of the loan.
Upstart also offers fast funding. You can get you your loan funds as soon as the next business day.
Upstart Personal Loans Overview
The loam amount for Upstart personal loans ranges from $1,000 to $50,000. APRs range from 6.7% to 35.99%. Applicants can choose repayment terms of three or five years with no prepayment penalty. The loan amount you can be approved for depends on your income, the state you live in, and other applicable terms. Personal loan rates also vary by state and are dependent on several factors, including your credit score.
Upstart personal loans have a fixed interest rate, so you don’t have to worry about fluctuating monthly payments. Upstart charges an origination fee that ranges from 0% to 8% and is based on the loan amount. Origination fees are deducted from the loan proceeds before your funds are dispersed and are non-refundable. Furthermore, note that cosigners are not allowed on Upstart loans.
Upstart focuses on borrowers who may not have traditional credit scores but have a solid work history and education. The minimum credit score is 620, but there is no requirement for the length of credit history or income.
The average borrower with Upstart also has a low debt-to-income ratio and is between 22 and 35 years of age. Despite the required credit minimum, the average score is around 692 and the average income is around $100,000.
Some borrowers are using Upstart personal loans for debt consolidation. Those who qualify for an Upstart personal loan with lower interest rates could save money when consolidating credit card debt.
However, you can use your Upstart personal loan for almost anything, including home improvement, paying for college, small business, medical bills, moving, vacation, wedding, or other large purchases.
Each loan is underwritten specifically for the individual loan applicant. For example, they may assess a recent college graduate based on academics. In comparison, someone with a solid work history and substantial credit profile will need to demonstrate a stable income and good credit.
Upstart Application Process
When you’re ready to apply for an Upstart personal loan, the first step is to determine what rate you could be approved for. Start by answering just a few questions and find out the best interest rates available to you.
This step does not impact your credit score. A few questions about your job history and education are necessary, including what school you attended, your area of study, and what company you currently work for.
You can then determine if you want to proceed with the application based on your loan offer. This step is nearly instant and is based on the general information you provide. However, it isn’t a guarantee of approval.
The next step is to complete the actual application, which the online lender will review. At this point, you provide personal information such as your Social Security number, driver’s license, and other data necessary for the lender to review your file.
Upstart verifies your employment and education, plus runs an official credit report. If you are self-employed, you must have had your own business for at least a year and filed a tax return.
This process may take longer than other online lenders because Upstart reviews more information than just your credit report. Not all applicants will be approved. However, if your application is approved, you’ll be able to see your exact loan terms, loan amount, interest rate, and monthly payment amount that you qualify for. At this point, you can review and accept the loan.
Once You’re Approved
Upon loan approval, you’ll need to provide your personal bank account information along with automatic monthly payments to repay the loan. You can set up automatic payments, manual ACH payments, or pay by check. You can also change your payment preference at any time.
With most personal loans from Upstart, you’ll receive the funds as fast as one business day after you sign the loan agreement. For loans used to fund education related expenses, there is a three-day waiting period. Your first payment will be due 30 days after you have been approved and received your funds.
Upstart personal loans come with fees you may incur in certain situations. A late payment fee of $15 or 5% of the monthly past due amount is due each time you make your payment late. In addition, if the check or ACH is returned, you’ll be charged a $15 refund fee.
If you wish, you can pay off the loan early at any point with no penalty. You can also apply for a second loan through Upstart if you’ve made your loan payments on time for six consecutive months. Once the loan has been paid off, you must wait 60 days before applying for a new loan.
Upstart Special Features
What makes Upstart different from other personal loan lenders is its ability to use broader factors to determine whether you qualify for a loan. For example, instead of just basing approval on credit score and income, they also look at education, including the academic program you were in.
This allows more applicants to be approved even if they lack a credit history, which is why this loan appeals to college graduates and young professionals.
The applicant does not need a job to qualify for this particular loan. Another benefit is that you have some flexibility with making payments. You can choose bi-weekly or monthly payments. If you run into financial trouble, you may qualify for different repayment options.
Upstart allows you to make payments, schedule recurring payments, and change your monthly payment date, via the online borrower dashboard.
Upstart was founded in 2012 by three former Google staff: Dave Girouard, Paul Gu, and Anna Counselman. The team’s goal was to create a lending company that considered other factors beyond your credit score to give more people access to money when they needed it. Instead of basing every application on the same criteria, they would customize it to each person’s situation, experience, and education.
Upstart has received a range of customer reviews, encompassing both positive and negative aspects of their lending services. On the positive side, many customers appreciate the easy and straightforward online application process, which often results in quick approvals and funding.
The platform’s use of alternative data, such as education and job history, to evaluate creditworthiness allows borrowers with limited credit history or lower credit scores to access personal loans more easily.
However, some customers have reported concerns regarding higher interest rates compared to traditional lenders, especially for those with poor credit. Additionally, a few borrowers have experienced issues with customer service, such as slow response times or a lack of clarity in loan terms and conditions.
Upstart currently has a Better Business Bureau (BBB) rating of A+, which indicates great customer service. They also have very few complaints. You can find more Upstart reviews at other review sites as well.
What to Consider Before Taking Out an Upstart Personal Loan
Upstart is a great option for people looking for a personal loan who may not qualify for other financial products. This company offers unique features to improve a person’s chance of approval. However, it isn’t a fit for everyone. Before taking out any personal loan, ask yourself these questions.
Do you qualify?
While you may not need to have a traditional credit history with a good to excellent credit score, you will need strong criteria to get approved for an Upstart loan. For example, you can’t have bad credit with a ton of late payments or other negative information.
For Upstart, no credit is preferable to bad credit. But even if you have very little to no credit, you’ll still need other criteria to qualify. You will need a U.S. bank account and a regular source of income or long-term employment. A college degree in a competitive field may also improve your chances.
Have you compared other offers?
While Upstart offers some of the lowest personal loan rates for people who lack traditional credit, it may not be the best rate. Compare Upstart to other financing options, such as a traditional loan at a bank with a cosigner. You want to ensure you get the best deal for your money, so it’s safe never to make any assumptions until you fully compare all options.
What are your future financial goals?
Any time you take out a personal loan, it’s best to pay it off as quickly as possible to reduce interest and other fees. To accomplish this, try to increase your payments over the minimum amount required. If your credit history is new, it’s also important to establish positive credit to make it easier to be approved for financing in the future, like a mortgage or car loan.
An Upstart loan can provide a solid foundation if you make your payments on time. The company provides your loan payment history to the three credit bureaus, which can help increase your credit score over time. On the flip side, Upstart also reports late payments, which can damage your credit, so be sure to make your payments on time.
What will you be using the loan for?
Before taking out a loan with Upstart or any other lender, make sure it’s going towards something you need and work hard to get the best rates and terms possible. In some situations, a secured loan may be the best answer. In other scenarios, waiting to pay cash or establishing a higher credit score may be the ideal option.
You can always discuss your options with a financial counselor to help you understand the impact of the choices you make. Look at the overall cost of the loan and how much you must pay monthly to determine if you can afford the loan and if it makes sense in your situation.
Check out our other personal loan reviews below to continue exploring your options.