You have financial woes and heard that Upstart offers personal loans.
But in a crowded market of financial institutions offering loans, choosing the ideal one can be challenging.
Is Upstart the best loan option for you?
Upstart Personal Loans are a good choice for those with poor credit scores and limited history. But Upstart charges extra fees, and its average APR is relatively high.
So if you want a fee-free loan for bad credit, there are better loan options for you.
Upstart is an online lending platform founded by former google employees in 2012. It uses Artificial intelligence (AI) to help borrowers gain access to loans at affordable rates.
Unlike traditional lenders that use credit scoring models to determine whether a borrower gets a loan, Upstart looks beyond that to quantify risks. So, it helps evaluate lending risks and ensure credit is offered based on real risk rather than using a scorecard.
Since Upstart is an online platform, many people have difficulty believing it is secure. However, obtaining loans via Upstart is safe as it has an NMLS ID verifying its authorization to operate in the US. You can take out loans; rest assured of transparency and good delivery.
Upstart Personal Loans Highlights
- Minimum credit score: 300
- Estimated APR: 5.35%-35.99%
- Loan Amount: $1,000 to $50,000
- Repayment Terms: 3 or 5 years
Origination fee: 0% to 10%
Late fee: 5% of the outstanding amount or $15
Returned check fee: $15
Paper fee: $10
- Funding Time: 1 day
- Loan Availability: All U.S. states except West Virginia and Iowa
- Loan minimums: The minimum loan available to borrowers in the U.S. vary from state to state. For instance, Hawaii gives a $2100 minimum loan, while Georgia and Massachusetts offer $3100 and $7000, respectively.
- Fast Funding
- Considers factors beyond your credit score
- Option to change payment date
- Option to pre-qualify for a soft credit check
- No prepayment fees
- Can be used for educational expenses
- Offers free financial Education
- Good customer feedback
- Upstart charges extra fees
- The average APR is relatively high
- Only two repayment options of three or five years
- No joint, co-signed, or secured loan
- No mobile app to manage loans
Upstart gives a credit chance to almost every borrower, including those with a bad credit score or no credit history. You can access quick fixed-rate personal loans from $1000 to $50,000.
Where Upstart Personal Loans Stand Out
99% Of Loans Get Funded Within One Business Day
Loan application and approval on Upstart happens remotely and does not take more than a few minutes.
After approval, the loan amount usually will be deposited in your account the next business day if you agree to the loan terms before 5:00 p.m. ET from Monday to Friday. Most loans are deposited within one business day except for educational loans, which require a 3-day wait period.
It Considers Factors Beyond Your Credit Score
Upstart gives almost every borrower a chance to borrow by accepting applications with zero credit history. It uses AI-driven algorithms to review loan applications, measure risk and determine loan amounts.
You Have the Option to Change the Payment Date
Upstart adds a 15 days grace period to borrowers' due date, meaning you can move your repayment forward to avoid late fees.
For instance, if your due date is the 16th, you can move it up to the 25th or even the 31st. That way, you can enjoy the grace period during your monthly repayment without paying any late fee.
Pre-qualification is Available
Upstart allows borrowers to do pre-qualification that only warrants a soft credit check which won't affect your credit score. However, when you apply for a loan, Upstart can do a hard credit pull that may affect your credit score slightly.
No Prepayment Fees
Upstart does not charge borrowers for early repayment as some lenders do. You can repay your loan fully before the loan term lapses without facing penalties.
Loans Can Be Used for Educational Expenses
Unlike several lenders that restrict borrowers from using personal loans for tuition and student loan repayment, Upstart lends you money for educational expenses.
You can always take out a loan to settle your tuition and pay off your student loan if you don't stay in California, Illinois, Washington, Washington DC, or Connecticut.
It Offers Free Financial Education
Upstart provides resources on its site to help borrowers manage their finances better and develop healthy credit-building habits. It also has a personal loan calculator that helps borrowers determine monthly repayment costs based on APR and repayment terms.
It Enjoys Good Customer Feedback
Several borrowers on Upstart leave positive reviews on some famous rating websites, like Trust pilot and Consumer Affairs. That further proves the credibility of the AI-driven lending platform.
Where Upstart Personal Loans Fall Short
Upstart Charges Extra Fees
In addition to interest, the common fees charged by Upstart include a 0% to 10% origination fee, late fees of 5% or $15 (whichever is higher), and a $15 returned check fee.
For instance, securing a $30k loan with a 10% origination fee means you'll be paying $3000. Since most lenders deduct the origination fee from the loan, you will get a $27000 deposit.
The Average APR is Relatively High
Upstart offers its personal loans at a fixed interest rate- with 25.05% being the average APR on a five-year loan.
The minimum interest rate exceeds offers from some lenders and the maximum interest is also among the highest that traditional lenders charge.
Only Two Repayment Options of Three or Five Years
Upstart offers only two loan terms which can be limiting to some borrowers. You can only select a three or five-year period regardless of the loan amount.
No Joint, Co-signed, or Secured Loan
You cannot jointly borrow a loan with another individual when using Upstart. You also cannot tender collateral to increase your borrowing chance as well.
No Mobile App to Manage Loans
Upstart is currently optimized for web use only. You cannot access the lending platform on the go with a mobile app.
Compare Upstart With Other Lenders
Minimum credit score
Three and five years
Two to seven years
Two to five years
Lenders with good credit
Low credit scores from 580
Flexible payment options
Upstart vs. Upgrade
Upstart offers credit to people with the lowest credit score, 300 while Upgrade's minimum is 580.
Comparing the repayment terms, Upstart offers only two options between three and five years, while Upgrade is more flexible, with terms spread across two to five years. In addition, Upstart also offers a higher loan limit than Upgrade.
Overall, you will have a higher approval chance with the lowest credit score with Upstart than Upgrade. However, Upstart repayment terms can be too limiting and uncomfortable compared to Upgrade, which stretches up to seven years.
Upstart vs. Avant
Upstart and Avant have similar repayment options. However, Avant has a higher minimum credit score than Upstart. That means borrowers have a higher chance to borrow at Upstart than at Avant since credit score is not an issue with Upstart. Avant also has a higher APR rate than Upstart.
In summary, Upstart Personal loans seem like a better option for both people with poor and excellent credit scores.
Requirements for Upstart Personal Loans
Minimum Credit Score: According to Upstart, borrowers with the lowest credit score, 300, can get a loan on the platform just like anyone with the perfect score. It also considers those without little or no credit history and accepts applications from people with all types of credit.
Minimum Annual Income: Upstart accepts $12000 as the minimum annual income from borrowers from different sources, including;
- Child support
- Social security
When applying for an Upstart personal loan, ensure you submit acceptable proofs for any of the above income sources to increase approval chances.
Credit Reports: You should not have delinquent or derogatory accounts, including bankruptcy, foreclosure, repossession, collection, and missed payments within the previous 12 months. The only exceptions are paid tax liens or civil judgments, which are no longer included in the credit history.
Inquiry Times: Your total inquiry times within the past six months should be less than six, with the student, auto, and mortgage loans not inclusive.
Age: The minimum age requirement is 18 years, except for Alabama and Nebraska, which require you to be 19 years old.
Identification: Upstart requires you to have an SSN, verifiable name, valid email address, and date of birth.
Citizenship: All borrowers must reside in a U.S. state, save for military personnel in service.
Bank Account: You must have an active personal account with a routing number at a financial institution in the U.S.
Job: You must be currently employed or beginning a full-time job within six months of the loan application.
Apply for an Upstart Personal Loan Online Within 5 Steps
1. Do a pre-qualification
It is always better to start your application by submitting a pre-qualification form. That helps you to determine your estimated APR and fees based on your preferred loan term and amount.
During the pre-qualification, you must fill in personal details and information about your income, savings, education, and previous loans. Upstart then does a soft check and gives you a quote in about five minutes.
2. Shop for Loans
After the pre-qualification, some offers will be sent to you if you pass. You are to compare the costs and terms of each loan before making a decision. Only choose the one you can afford with suitable repayment terms and fees.
3. Apply for the loan
After selecting a loan, submit a formal application to the lender. When applying, you may need to tender proof of income, tax returns, and other documents, depending on the lender. Please note that the lending company can do a hard credit pull which may affect your credit score slightly.
4. Wait for approval and sign the loan agreement
Since Upstart is run by AI, you'll immediately receive a decision when you send an application. If your loan is approved, what is left is to sign the loan terms. The fund will be deposited into your account within a business day.
5. Start Repayment
Repayment dates usually happen about one month after disbursement. To avoid late payment fees, you must pay your monthly installments before the due date.
How CreditYelp Rates Upstart
|Requirements & Application||4.5||The application process and requirements are clear and straightforward.|
|Loan flexibility||4.5||Upstart allows you to change the payment date.|
|Rates, Fees & Other Terms||4.2||Upstart charges extra fees, and the average APR is relatively High.|
|Customer experience||4.3||Upstart has fair customer reviews across different platforms.|
|Transparency||4.5||Upstart allows users to prequalify online to preview potential loan offers.|
How is the interest rate determined?
Upstart uses its AI algorithm to consider borrowers' applications by checking their credit score, income, employment, education, credit history, and more. Those variables will help determine how much to give out to you and what rate is suitable for such a loan.
Who is an Upstart Loan Suitable for?
Upstart Loans are most suitable for people with excellent credit scores and a good history. Like most lenders, they are likelier to enjoy the lowest APR of 5. 35% with zero origination fee because they pose less financial risk.
Another group that Upstart loans are suitable for are those with poor credit scores and limited history. Since several personal loan lenders don't consider loan applications from such a person, Upstart is a good place to shop. However, the APR and other fees can be on the high side.
Nevertheless, borrowers with bad credit have a higher loan approval rate with Upstart than with most lenders.
Note: Upstart reserves the right to withdraw your loan approval if there is a noticeable drop in your credit score or you take out another loan during the same period your loan is under processing.
What Can Upstart Personal Loans be Used For?
Ordinarily, there are two types of personal loans: secured and unsecured. However, the loans offered by Upstart are all unsecured, meaning you don't need collateral to take out one.
Upstart allows you to use the amount borrowed to fund different purposes. You can use it for home renovation, debt consolidation, event funding, medical expenses, moving, refinancing, credit card consolidation, and more.
You can also use it to sort educational expenses like repaying your student loans which other personal loan lenders don't allow.
However, California, Illinois, Connecticut, Washington, and Washington DC residents are exempted from using Upstart Personal loans for educational purposes.
Can You Refinance a Personal Loan With Upstart?
Refinancing allows you to borrow a loan with lower interest to pay off existing debt. Normally, some lenders allow borrowers to refinance their loans while adjusting the terms. However, Upstart does not have particular provisions for refinancing their personal loans.
Instead, you can take an additional Upstart loan to pay off the existing one if you pass the following criteria;
- You have not missed a payment date in the past six months.
- Your outstanding loan on Upstart does not exceed one.
- Your existing loan is not over $50000.
- You don't have a past-due payment.
Is Upstart Legit?
Upstart is a certified lending platform recognized by the Consumer Finance Protection Bureau (CFPB). Because Upstart is mostly run by AI, the bureau has evaluated its operations twice and found no fault.
The AI evaluates and processes loan applications while approving most and streamlining the lending process for lenders and borrowers.
You can borrow loans from Upstart with higher hopes of fast approval despite having a bad credit score and no history. It simply checks the other requirements to determine your eligibility.
How is Upstart's Customer Service?
Upstart's Customer service is superb according to users, which is evident in their 4.9 out of 5 scores on Trustpilot. You can reach them in diverse ways, from sending a text through a contact form, email, or call.
General Upstart call services are usually available from 9 a.m. to 8 p.m. every day of the week, including weekends. For payment support, you'd have to call sometime between 9 a.m. to 9 p.m. from Mondays to Fridays and 10 a.m. to 7 p.m. on Saturdays.
The review data come from Trustpilot, ConsumerAffairs, and WalletHub.
4.9 stars based on 200 reviews
FFrank5.0Easy! No BS. I would highly recommend this site.
TTorri5.0This is one of the easiest loan programs I have used. I will definitely recommend to anyone that I that needs a loan.
MMonica5.0What made my experience great was how easy the process was. From applying to being qualified and receiving the loan!
EEthan Blitz5.0I needed to consolidate my debt. The process was extremely easy and I received a quick response. Thank you Upstart.
RRikki5.0As 24 y/o figuring it out, I looked into consolidating my debt into one place. Upstart made it easy to understand.
NNorman Heusser5.0Easy application, lowest rates and flexible payment plans. Overall great experience.
EEric5.0I was in a tough spot after being sick, needed to get back on track and Upstart was honestly easy and pain-free. They did not make me feel like I was failing at life when needing help. A big thank you to Upstart!
JJohn5.0Simple and straight forward with loan rates lower than other major creditors. Help to consolidate and move debts away from high interest credit cards.
BBob2.0Not a great company. Horrible customer service and high interest rates.wiah i wouldve nevwr gor a loan there.dont if u need one u will regret
AArizona Native5.0Great customer service. Ease of use to apply and simple process. As long as you’re tech savvy this is the best way to apply for a loan!
1 stars based on 2 reviews
CChris1.0After being approved via online and through my bank account. I then was asked to send supporting documents proving my account was my account. After calling the credit union, getting documents and sending proof over to them multiple times. While still in process of gathering documents they denied me for not verifying me before process was complete. I'm pretty sure this Violates Consumer protection laws! Stay Away from this lender!
RRobert1.0After initially accepting the loan from Upstart I decided not to accept the loan due to the extreme interest rate. After contacting them I explain to a supervisor my situation. He reviewed the call log and informed me that I had called before the deadline to cancel the loan. He informed me that an investigation had to be done then they would not hold me liable for the processing fee and wait 5 to 7 days for an email update. The end result was that I was charged the processing fee $3,617.60 anyway after I was told I wouldn't be charged. Upstart is only good as long as you don't want to cancel the loan. A total rip off to someone who is already trying to get out of debt.
3.2 stars based on 200 reviews
RRwontfo1.0<p>I have had a loan from up start and it was a mess from stat to finish ! Do not use these people for any amount of money ! Made all of my payments and got to the last one and then they hit me with extra charges . So I asked to speek to a manager and was told I had to pay extra interest . Spoke with Eduardo and got nowhere. Stay away from these people!!!!</p>
Mmarivilha11.0<p>Awful, unethical, does not "look beyond your credit score". Simply a for profit company. Profits above people. I am hugely dissapointed in their lack of ethics. I regret having ever taken a loan through them, and all my payments are on time, every single month! HUGE thumbs down!</p>
RRosa1.0<p>I paid off that loan more than 2 months ago, i am not sure why they keep that information as im still owe them. I need something to be done asap</p>
MMaryNicoSmith1.0<p>If I could give 0 stars I would. This company has continued to waste my time. It’s not so easy to get approved! I’ve applied every month for the last 6 months for a personal loan and been denied because they’re not able to verify the information on my application. I emailed them asking what they weren’t able to verify and maybe I could submit more documentation and their response was just to reapply in 30 days. I’ve only been asked to submit proof of income and a bank statement and after submitting would get denied!</p>
TTwistedxone1.0<p>i borrowed 18500 to pay it off 8 months later called and got payoff sent them a check for 17699.oo only to get an email 2 months later stating i still owed them 261 and change they would not cut me any slack even thoe it was their fault i still owed them money . never do business with upstart they will screw you</p>
Ssaira_rabb1.0<p>Do not use this company - I did not receive a call/email that my auto payment failed while I was overseas. I was 9 days late and they said on my dashboard that "I paid late, but reported good standing with the credit bureaus" BUT they did report me and now my perfect history is shot. They lie and say they are here to help you, but they in fact are quick to report you no matter the circumstances. They have no grace. Go to SoFi, they are understanding, kind, and help you before they report you to the bureaus by emailing you, and notifying you when they have a problem with your payment. I hate companies with no heart.</p>
TTLaShaF19901.0<p>They adverse that you only need 300 credit score. My credit has been much higher than that both times I've applied. I was still rejected for debt consolidation!</p>
AAnika Tasnim1.0<p>Would not recommend. Very poor customer service. First they said I was approved and made me do all the paperwork, and then all of a sudden I was not. Highly disappointed.</p>
CCynthia5.0<p>Easy to apply helped out and able to manage payments easy breezy. So once I pay off. All use them again. I had choices to pick from.</p>
JJim Rayburn1.0<p>Highway robber. Plain and simple. When I take a loan of $1,800 o save my business, they are charging interest of around 29.91% annualized to around 35%. Making payments of $50/mo for 5 years, I will start by paying $5 principal and $45 in interest. At the end of the 5 years, I have paid $1,200 in interest for a $1,800 loan for my business. This means that I paid $0.67 for every $1 that I borrowed to save my business. Also, when you look at the terms and conditions, they are simply a broker to the actual creditor.</p>