About Lender
Upstart is a peer-to-peer lending platform founded in 2012. The company was created to be an alternative to banks, other personal loan lenders, and credit card companies for borrowers who do not have an established credit history or high credit scores.
Upstart uses a unique model that combines traditional credit scoring with machine learning. This allows the company to consider a broader range of data points to evaluate a borrower’s creditworthiness, including education, employment history, and other factors that traditional lenders do not consider.
On the platform, borrowers can apply for Upstart loans for debt consolidation, home improvement, personal expenses, and more. Upstart personal loans are available in amounts from $1,000 to $50,000 with terms ranging from 3 to 5 years.
Key Features
- Innovative process. Upstart's use a combination of traditional credit scoring and machine learning to evaluate a borrower's creditworthiness. This allows the company to consider a broader range of data points when making lending decisions, including education, work experience, and income potential.
- Quick application. The Upstart personal loan application process is designed to be quick and easy. Borrowers can apply online and get a decision in minutes. If approved, funds can be deposited into the borrower's bank account the next day.
- Competitive rates. Upstart offers competitive rates on loans which can be lower than traditional lenders. Rates are based on the borrower's creditworthiness and other factors and are typically fixed for the life of the loan.
- Flexible loan terms. Loans on Upstart are available from $1,000 to $50,000 with terms from 3 to 5 years. Borrowers can choose a term that fits their financial situation and budget.
- Car refinance loan. A car refinance loan is a new loan to replace your existing car loan with different terms and rates. It can save you money by lowering your APR or monthly payments. It may be suitable if your car is less than 10 years old, has fewer than 140,000 miles, your current loan balance is between $9,000 and $60,000 and you initiated your current loan at least 1 month ago.
- No prepayment penalty. Borrowers on Upstart can repay their loans early without incurring a prepayment penalty. This can be a big deal for borrowers who want to save money on interest charges.
- Diversified investor base. Upstart is open to individual and institutional investors which helps to diversify the investor base and reduce risk. Investors can fund loans in increments as small as $25 and potentially earn higher returns than traditional investments.
Pros and Cons
Pros
Unsecured loan. An unsecured loan is borrowed money from a lender without the need for collateral like a house or car. Upstart offers mostly unsecured online personal loans but some lenders may secure the loan with other accounts.
Short term loans. Offer $200 to $2,500 with 3-18 month terms. No hidden fees, you see the cost before you apply. The cost is consistent, up to 36% APR.
Lower credit score. Upstart has a lower minimum credit score requirement than many traditional lenders. Borrowers with a credit score of 300 or above can be considered for a loan which may make it easier for some to qualify for financing.
Multiple purpose. Personal loans offer funds that can be used for multiple purposes. Common uses include debt consolidation, medical expenses, home improvement, education related expenses, relocation, weddings or vacations.
Cons
Higher rates. While Upstart offers competitive rates, some borrowers may find the rates are higher than traditional lenders. This is especially true for borrowers with lower credit scores who are considered higher risk.
Origination fee. Upstart can charge an origination fee of 0% to 10% for its personal loans. So you may save money compared to other lenders who charge origination fees.
Hard credit inquiry. Soft credit inquiries, like checking your loan rate with Upstart, do not affect your credit score. But when you apply for a loan, a hard inquiry is usually performed. This type of inquiry can affect your credit score and is visible on your credit report.
Not available in all states. Upstart personal loans are not available in all states so financing may not be available to all borrowers.
Reliability
Wide acceptance. Upstart, founded in 2012, has funded over $9 billion in loans to more than 600,000 borrowers, that’s how wide its acceptance is in the lending space.
Good reputation. Upstart has good reviews from both borrowers and investors, that’s how good its reputation is in the industry.
Clear terms and conditions. Upstart’s model, powered by machine learning algorithms, allows for a full credit evaluation of borrowers, so lending decisions are more accurate and terms and conditions are clear.
Consumer protections. Upstart has robust security measures, 256-bit SSL encryption and regular system monitoring, to protect customer data, so consumer protection and data privacy is ensured.
Upstart personal loans review. Upstart is a member of Better Business Bureau with an A+ rating which means they resolve customer complaints fast and effectively, that’s how good its reputation and reliability in the lending space.
How to Apply for an Upstart Loan?
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Check your rate. Go to the Upstart website. You can check your rate without affecting your credit score. This takes less than 5 minutes and requires some basic personal and financial information. Checking your rate is a soft credit inquiry which does not affect your credit score.
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Get approved. After checking your rate, if you decide to apply, most customers get instant approval. This step requires no paperwork for most applicants but final approval is subject to a hard credit inquiry.
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Provide information. Please fill up your personal details, income information, 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 hard 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 approved and signed loan agreement, personal loan funds can be disbursed in as little as 24 hours if you accept your loan by 5 pm EST (excluding weekends and holidays). Funding is fast so you can use your loan amount as soon as you need it.
Conditions and Requirements
Conditions
Loan purpose. Loans can be used for almost anything, starting a business, paying for coding bootcamp, eliminating student debt, paying off credit cards. Use of funds must be in accordance with Upstart’s Acceptable Use Policy.
Approval process. Initial rate check is a soft inquiry which does not affect your credit score. But proceeding with an application is a hard credit inquiry which will affect your credit score.
Loan disbursement. If you accept your loan by 5 PM EST (excluding weekends and holidays), funds will be sent the next business day.
Loan repayment information reporting. If you take out a loan, repayment information will be reported to the credit bureaus.
Personal loans. Borrow amounts range from $1,000 to $50,000. APR range from 6.4% to 35.99% 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. Average yearly savings of $1,065 on refinanced auto loans. Specific APR and terms will be determined based on your credit, income and other information provided in your loan application.
Requirements
Borrower eligibility. You must be at least 18 years old and have a valid email address. You must also provide verifiable information such as your name, date of birth and social security number. You must maintain a minimum annual income of $12,000 and meet the minimum credit requirements of our lending partners. You must also have a personal bank account at a U.S. financial institution with a routing transit number. You must have a full-time job, a full-time job offer within 6 months, a regular part-time job or another consistent source of income. Note that additional requirements may apply.
Credit score impact. Checking your rate for both personal and auto refinance loans is a soft credit check which does not affect your credit score. Further processing after accepting the rate is a hard credit check.
Instant approval. Most customers get instant approval without additional paperwork but final approval is subject to a hard credit inquiry.
No pre-payment penalty. Loans have no pre-payment penalty so you can pay off the loan early without additional fees.
Minimum loan amounts. Vary by state to comply with local regulations.
Loan terms. Fixed interest rate for personal loans and APR includes all fees with no hidden charges.
Ways to Receive the Money
To get the personal loan funds you must add and verify a personal bank account in your name, Upstart cannot accept business accounts. Timing of funds depends on when you accept the loan and sign the contract. If you accept the loan before 5:00 P.M. ET on a business day (Monday to Friday) the funds will be sent the next business day. If you accept the loan after 5:00 P.M. ET the funds may be sent 2 business days later. If you accept the loan on a non-business day (holidays or weekend) the disbursement will begin the next business day and the funds will be in your account 2 business days after signing the promissory note. Note that timing may vary depending on the loan product and lending partner.
Products
Personal loans. Upstart personal loans have low fixed rates with no hidden fees and next day funds. These loans are for various purposes such as debt consolidation, education expenses or personal expenses. Borrowers can request amounts from $1,000 to $50,000 with rates lower than traditional models based on credit, income and other information provided in the loan application.
Auto loan refinance. Upstart allows you to refinance your car loan and potentially save $1,065 per year for approved consumers. The process to check your rate is quick and has no pre-payment penalty and is designed to save you by swapping out higher rate car loans with better terms through Upstart.
Consolidation. Specifically designed to help manage and consolidate debt, Upstart loans can be used to combine multiple debt sources into one payment. This could be paying off credit card debt, consolidating other debts or streamlining finances under a lower interest rate so you can manage your monthly payments and potentially pay less over time.
Short-term relief. While the site doesn’t have products labeled as “Short-Term Relief” Upstart’s personal loans seem to be flexible enough to cover immediate financial needs or unexpected expenses. The fast approval and next day fund transfer is indicative of quick financial relief to qualified borrowers.
Additional services. On the investment side Upstart offers Investment analytics, comprehensive analytics and reporting tools for investors. This feature allows investors to monitor their investments, see returns and make informed decisions on their investment strategy. Also Upstart’s Loan calculator is a great tool for borrowers. This tool allows you to calculate estimated monthly payments and total interest charges for a loan and see the financials of taking a loan with Upstart.
Other Personal Loans
Reasons for Loan Refusal
Upstart’s lending approach provides insight into what might cause a loan to be declined. The company is unique in its followinf process as it goes beyond traditional credit scores to evaluate borrowers. This includes education, major, job history, and other signals of financial responsibility and potential. Therefore, reasons for denial might be a lack of credit history, limited employment history, or other factors the model uses to predict creditworthiness. Upstart aims to fund high-quality borrowers even with limited credit and employment history, so a full evaluation of the applicant’s financial and personal background plays a significant role in the decision-making process.
How to Repay an Upstart Loan?
To pay back an Upstart loan, first make sure you have added and verified your bank account by following these steps. Go to your dashboard and click on “Add Bank Account” under “Bank Accounts”. You have three options for verification: Use your bank login for instant verification, upload an image of a voided check to be verified within one business day or provide your account and routing number and Upstart will make two small deposits into your account which you’ll need to verify within 2-3 business days. Once your bank account is verified and added, you can choose automatic monthly payment for easy repayment.
Loans like Upstart
OppLoans
OppLoans is a notable financial service provider that offers consumer loans varying from $500 to $4,000. They expedite the funding process to ensure that approved applicants receive the necessary funds promptly, which is advantageous for those dealing with immediate financial concerns. OppLoans offers adaptable repayment conditions, giving customers the choice between 9, 12, and 18-month loan terms. This adaptability allows borrowers to opt for a repayment plan that matches their financial ability, ensuring a seamless and manageable loan journey.
Rise Credit
RISE Credit is a reliable online lender that provides loans up to $5,000. They have a streamlined application procedure, allowing borrowers to have funds transferred to their accounts as early as the next business day. They present the flexibility of choosing a payment schedule that fits with the financial preferences of the customers, although some state-based restrictions might apply. A notable feature of RISE Credit is its 5-Day Risk-Free Guarantee, which permits borrowers to revoke their loan and return the principal with zero fees or interest within the given period. Additionally, RISE Credit grants customers complimentary access to their credit score and credit monitoring alerts through Credit Score Plus, offering valuable financial insight.
OneMain Financial
OneMain Financial stands as a distinguished and enduring lender, offering personal loans that range between $1,500 to $20,000. Boasting a century’s worth of experience in the financial sector, they have garnered the trust of a vast customer base. Their loan terms include fixed rates and fixed payments, offering a predictable and manageable repayment scenario to borrowers. OneMain Financial emphasizes personalized service, ensuring that the distinct needs of each customer are addressed. With a widespread network of approximately 1,400 branches, they provide easy access and convenience for individuals in search of financial aid.
Universal Credit
Universal Credit requires applicants to have a minimum credit score of 560, thus excluding those with no credit history. It is appealing for its credit-enhancement features, making it suitable for individuals with fair or poor credit looking to better their scores. Providing larger loan amounts than Oportun and next-day funding upon approval, it emerges as a solid choice for significant, urgent financial needs. Universal Credit extends its loan services across all 50 states and Washington, D.C., offering a wide geographical coverage.
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
- 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
- Upstart Loans for October 2024
