Upstart Review

Upstart offers a pathway to personal loans for individuals with fair credit, starting at a score of 600, by evaluating various non-traditional credit metrics. This approach makes it a viable choice for those seeking prompt access to funds but facing challenges in traditional loan approval processes.

Moreover, Upstart accommodates smaller loan amounts, beginning at $1,000 in most states, except for Massachusetts ($7,000), Ohio ($6,000), New Mexico ($5,100), and Georgia, ensuring customers borrow only what they require.

Yet, this enhanced accessibility comes with trade-offs. Upstart’s APRs tend to be higher, and borrowers are constrained to three- or five-year repayment terms—shorter and less flexible compared to alternatives. Additionally, borrowers may incur origination, late payment, unsuccessful payment, and paper copy fees. Nevertheless, for individuals without credit scores qualifying them for more affordable loans, Upstart remains a viable choice.

Summary of Upstart

While many lenders featured here typically require a good to excellent credit score, Upstart caters to individuals with poor credit. With Upstart, you have the flexibility to borrow anywhere from $1,000 to $50,000. Unlike direct lenders, Upstart operates as a lending marketplace, connecting you with eligible banks and credit unions upon application. While this setup offers the advantage of comparing multiple options, it could also lead to receiving texts, emails, and phone calls from various lenders.

Through Upstart’s lending marketplace, you have the opportunity to explore loans from several different lenders. While those with lower credit scores might find Upstart appealing, individuals with excellent credit may find better-suited options with lenders that maintain higher credit score requirements, potentially offering lower interest rates.

Pros
  • Upstart extends its lending services to individuals with credit scores as low as 300 or even those with no credit history, offering opportunities for a wide range of borrowers.
  • With a minimum advertised rate of 7.8% (at the time of publication), Upstart’s rates are notably lower compared to those of many competitors, making it an attractive option for borrowers seeking affordable financing.
  • Upstart evaluates your entire financial profile, going beyond just your credit score. This comprehensive assessment can result in favorable rates for individuals with strong financial standings despite having a less-than-ideal credit score.
  • Borrowers enjoy the flexibility of paying off their loan early without incurring any prepayment penalties, allowing them to save on interest and settle their debt ahead of schedule.
Cons
  • Borrowers are subject to an origination fee ranging from 0% to 12% of the loan amount, which can increase the overall cost of borrowing.
  • Upstart’s maximum advertised rate of 35.99% is higher than that of many competitors, potentially resulting in higher interest expenses for borrowers with less favorable credit profiles.
  • Unlike some other lenders, Upstart does not offer same-day loan funding, which may be inconvenient for borrowers in urgent need of funds.
  • Borrowers are restricted to choosing between a three- or five-year repayment term, lacking the flexibility offered by lenders with more varied term options.

  • Upstart caters to individuals with poor credit. With Upstart, you have the flexibility to borrow anywhere from $1,000 to $50,000. Unlike direct lenders, Upstart operates as a lending marketplace, connecting you with eligible banks and credit unions upon application.Upstart does not provide in-person customer support during the borrowing process, which may be a drawback for individuals who prefer or require direct assistance.

Upstart Personal Loan Overview

Loan Amounts & Terms

  • Loan amounts: Upstart provides fixed-rate personal loans ranging from $1,000 to $50,000, with state-specific minimums applicable in Massachusetts ($7,000), Ohio ($6,000), New Mexico ($5,100), and Georgia ($3,100).
  • Loan terms: Borrowers can opt for personal loan terms of either three or five years, equivalent to 36 or 60 months.

Loan Costs

  • APR: Interest rates vary from 7.8% to 35.99%, without offering autopay discounts typical of other providers.
  • Origination fees: Upstart imposes a one-time fee ranging from 0% to 8%, deducted from the loan proceeds before disbursement.
  • Late fees: For payments overdue by 10 calendar days or more, Upstart levies a late fee amounting to 5% of the past due amount or $15, whichever is higher.
  • Prepayment penalty fees: Upstart does not penalize borrowers for early loan repayment.
  • Unsuccessful payment fee: A charge of $15 per occurrence applies when bank transfers (ACH) or checks fail due to insufficient funds or other reasons.
  • Paper copy fees: Borrowers requesting physical copies of documents and withdrawing eSign consent are subject to a one-time fee of $10.

How to Qualify for an Upstart Personal Loan

To secure approval for a personal loan with Upstart, applicants undergo a comprehensive evaluation based on various criteria. While each lender has its own unique underwriting standards, they typically assess factors such as the applicant’s credit history and financial capability to repay the loan, which includes income verification. While meeting these requirements doesn’t guarantee approval, they provide insight into whether a personal loan aligns with your financial situation.

Credit Score Criteria

Applicants must have a minimum FICO or Vantage score of 600 to be eligible for a personal loan. However, Upstart takes into account unconventional factors such as educational background, employment history, and residency status. Even individuals lacking sufficient credit history to generate a FICO score may still be considered. In addition to credit score, Upstart’s AI platform evaluates:

  • The applicant’s debt-to-income (DTI) ratio
  • Presence of bankruptcies or delinquent accounts
  • Number of credit inquiries in the last six months (excluding inquiries related to student loans, auto loans, or mortgages), which should be fewer than six

Income Requirements

Upstart mandates that borrowers have a full-time job, a confirmed job offer starting within six months, a regular part-time job, or another consistent source of income, with an annual income of at least $12,000. Additionally, applicants must not have any recent bankruptcies or outstanding delinquencies.

Co-signers and Co-applicants

Upstart’s policy prohibits applicants from applying for a personal loan with a co-signer or involving co-applicants. Loan approval is based solely on the individual merits of the applicant.

How to Apply for an Upstart Personal Loan

Securing an Upstart personal loan involves several steps, including prequalification for a rate, formal application submission, and awaiting approval. Here’s a breakdown of the application process:

  1. Prequalification:
    • Begin by completing an online prequalification form to determine your interest rate and APR. This form requires basic contact details as well as information about your education, income, savings, and recent loans.
    • Within approximately five minutes, you’ll receive a rate quote. Upstart conducts only a soft credit inquiry at this stage, ensuring that your credit score remains unaffected.
  2. Bank Account Verification:
    • After submitting your rate inquiry, Upstart will prompt you to verify your bank account.
    • You may be requested to upload supporting documents and might receive a phone call to confirm your information.
    • At this point, Upstart conducts a hard credit check, which is recorded on your credit report.
  3. Approval Process:
    • Utilizing its AI-driven system, Upstart grants approval for almost all loans promptly. As of the first quarter of 2021, Upstart instantly approved 71% of its loans.
  4. Loan Agreement Signing & Fund Disbursement:
    • Once you sign the loan agreement, the loan proceeds are directly deposited into your personal bank account within one or two business days.
  5. Repayment:
    • Borrowers can find their specific repayment date on their promissory note after loan funds are disbursed.
    • The first payment is typically due about 20 to 40 days from the loan origination date.

Funding Timeline:

  • Loans accepted before 5 p.m. EST, Monday through Friday, are usually funded on the following business day. However, if terms are accepted after 5 p.m., funds are transferred on the subsequent business day.
  • Loans intended for education-related expenses may experience additional delays, with funds released three business days post-acceptance.

Overall, Upstart reports that 99% of loan applicants receive their funds within one business day after accepting their loan terms. Borrowers also have the option to adjust their monthly payment date through Upstart’s online portal after fund disbursement.

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