Upstart is a peer-to-peer lending platform that was founded in 2012. The platform was created to provide an alternative to traditional banks, other personal loan lenders, and credit card companies for borrowers who may not have an established credit history or high credit scores.
Upstart uses a unique underwriting model that combines traditional credit scoring methods with machine learning algorithms. This approach allows Upstart to evaluate a borrower's creditworthiness using a broader range of data points, including education, employment history, and other factors that may not be considered by traditional lenders.
On the platform, borrowers can apply for Upstart loans for a variety of purposes, including debt consolidation, home improvement, and personal expenses. Upstart personal loans are available in amounts ranging from $1,000 to $50,000, with terms ranging from three to five years.
Pros and Cons
Pros
Unsecured personal loan. An unsecured personal loan is borrowed money from a lender without the need for collateral like a house or car. Though Upstart offers mostly unsecured online personal loans, some lenders may secure the loan with other accounts.
Short-term loans. Offer $200 to $2,500 with repayment periods of 3-18 months. There are no hidden fees, you can see the cost before applying. The cost remains consistent, with rates up to 36% APR.
Lower minimum credit score. Upstart has a lower minimum credit score requirement than many traditional lenders. Borrowers with a credit score minimum 300 or above can be considered for a loan, which may make it easier for some people to qualify for financing.
Various purpose. Personal loans offer funds that can be used for various purposes. Common uses include debt consolidation, medical expenses, home improvement, education-related expenses, relocation, weddings, or vacations.
Cons
Higher interest rates. While Upstart offers competitive interest rates, some borrowers may find that the rates are higher than those offered by traditional lenders. This is especially true for borrowers with lower credit scores, who may be considered higher risk.
Origination fee. Upstart can charge origination fees ranging from 0% to 10%for its personal loans. This means that borrowers can potentially save money compared to other lenders who charge origination fees.
Hard credit inquiry. Soft credit inquiries, such as checking your loan rate with Upstart, do not affect your credit score. However, when you proceed with a loan application, a hard inquiry is typically performed. This type of inquiry can impact your credit score and is visible on your credit report.
Not available in all states. Upstart's personal loans are not available in all states, which may limit the availability of financing for some borrowers.
How to Apply for an Upstart Loan?
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Check your rate. Begin by visiting the Upstart website. You can check your rate without affecting your credit score. This process is quick, taking less than 5 minutes, and involves providing some basic personal and financial information. Checking your rate uses a soft credit inquiry, which won't impact your credit score.
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Get approved. After checking your rate, if you decide to proceed, most customers receive instant approval. This step involves no paperwork for the majority of applicants, though final approval is contingent upon passing a hard credit inquiry.
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Provide information. Please write your personal details, income information, provide SSN or ITIN, registration address, personal bank account details and other necessary data for credit inquiry.
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Wait for a decision. A high credit inquiry may take some time. You can track the status of the check in your personal account on the website.
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Get fund. Once approving and signing loan agreement, the personal loan funds can be disbursed in as little as 24 hours, provided you accept your loan by 5 pm EST (excluding weekends and holidays). The speed of funding ensures that you can access your loan amount quickly for your needs.
Conditions and Requirements
Conditions
Loan purpose. Loans can be used for almost anything, including starting a business, paying for coding bootcamp, eliminating student debt, or paying off credit cards. Use of funds must be in accordance with Upstart's Acceptable Use Policy.
Approval process. The initial rate check is a soft inquiry that won't affect your credit score. However, proceeding with an application involves a hard credit inquiry that will impact your credit score.
Loan disbursement. If you accept your loan by 5 PM EST (excluding weekends and holidays), your funds will be sent on the next business day.
Loan repayment information reporting. If you take out a loan, repayment information may be reported to the credit bureaus.
Requirements
Borrower eligibility. You need to be at least 18 years old and have a valid email address. Additionally, you must provide verifiable information such as your name, date of birth, and social security number. It's necessary to maintain a minimum annual income of $12,000 and meet the minimum credit requirements set by our lending partners. You should also have a personal bank account at a U.S. financial institution with a routing transit number. Furthermore, you must have a full-time job, a full-time job offer starting within 6 months, a regular part-time job, or another consistent source of income. Note that additional requirements may apply.
Personal loans. Borrow amounts range from $1,000 to $50,000. The APR ranges from 6.4% to 35.99%, determined based on credit, income, and other information provided in your loan application. Not all applicants will qualify for the full amount or the lowest rate.
Auto loan refinance. Offers average yearly savings of $1,065 on refinanced auto loans. The specific APR and terms will be determined based on your credit, income, and certain other information provided in your loan application.
Credit score impact. Checking your rate for both personal and auto refinance loans involves a soft credit check, which does not affect your credit score. Further processing after accepting the rate will involve a hard credit check.
Instant approval. Most customers receive instant approval without needing additional paperwork, although final approval is subject to passing a hard credit inquiry.
No pre-payment penalty. Loans come without a pre-payment penalty, allowing you to pay off the loan early without additional fees.
Minimum loan amounts. Vary by state, ensuring compliance with local regulations.
Loan terms. Include fixed interest rates for personal loans, and the APR includes all fees with no hidden charges.
Editorial Opinion
Important
How to Choose a Lender
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Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.
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Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.
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Carefully review all the terms and conditions of your payday loan contract.
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Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.
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Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.
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Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.
Additional Resources
- About Upstart
- Upstart Account Review
- How to Apply for Upstart Loan
- How to PayOff Upstart Loan
- Upstart Reviews
- Upstart Mobile App
- All Upstart Coupons and Promo for October 2024
