Personal loans obtained through Upstart can be used for a variety of financial needs, including major purchases, debt consolidation, taxes, home improvements, and other large expenses. In addition, securing a fixed-rate personal loan with predictable monthly payments can be more cost-effective than credit cards with high, double-digit interest rates.
Many traditional lenders, such as local credit unions and banks, offer personal loans to their most qualified members. However, some borrowers find it easier to secure funding through online lending platforms like Upstart.
For some people, it’s quicker, but for others, it’s because Upstart considers factors beyond a person’s credit score when qualifying them for a loan.
Who is Upstart?
Founded in May of 2012, Upstart is a technology-driven lending marketplace that aims to provide affordable personal loans quickly and easily. The legitimate business prides itself on streamlining access to affordable credit using artificial intelligence (AI) as a key component of its platform.
Upstart works with multiple institutions to provide loans to qualified borrowers, boasting higher approval rates and lower losses over time. The process of getting a personal loan through the company is fully digital, with more than 91% of loans now completely automated.
Since its inception, Upstart has generated billions in loan originations, serving millions of customers across the United States. It has also long maintained an excellent rating on Trustpilot with more than sixty thousand reviews.
Personal loan options through Upstart
Although most Upstart personal loans aren’t explicitly tied to a specific need, borrowers may find that the loan offers they receive are a great fit for home improvement projects and other needs.
Loan amounts
Upstart primarily offers unsecured personal loans, meaning no collateral is needed, with loan limits ranging from $1,000 up to $75,000.
Repayment length and interest rate
Repayment terms for Upstart personal loans are either 3 or 5 years (36 or 60 months), depending on the borrower’s preference, and interest rates are fixed, ranging from a 6.2% to 35.99% annual percentage rate (APR).
What can you use an Upstart personal loan for?
Upstart loans can be used to cover various expenses, including medical bills, home remodeling, debt consolidation, weddings, vacations, income tax debt, moving costs, and other personal needs. Borrowers face very few restrictions on how they can use their loan proceeds.
Rate checks don’t affect your credit score
Individuals interested in an Upstart loan can begin the application process online by entering basic information, such as their name, email address, and the amount of money needed.
Upstart conducts a soft credit inquiry to help determine the initial loan amount and rate the borrower may qualify for with its lending partners. Borrowers can then evaluate the lender-specific offerings, review rates, and select the loan option that best fits their needs.
Once the loan application is fully submitted and approved, and an offer is accepted, borrowers can receive funding in as little as one business day.
The fine print on Upstart personal loans
While Upstart is a transparent lending platform that brings together borrowers and lenders, there may be some fine print to pay close attention to throughout the process.
Prepayment penalties
Luckily, no prepayment penalties are charged on any of Upstart’s personal loans, so you can save money by paying off the loan balance in full before the last payment is due.
Origination fees
Lenders that partner with Upstart may charge origination or funding fees as an upfront cost for originating the loan. Lenders vary, and these fees can range from 0% to 12% of the loan amount. A high origination fee increases the cost of the loan, so it is crucial to understand how this charge is calculated into your overall borrowing cost before signing on the dotted line.
Borrower creditworthiness
Upstart evaluates more than a borrower’s credit score to determine who is a good fit for a personal loan. The company touts its AI-powered application process, which also considers education, job history, and other unique information when evaluating a loan application.
While this may be beneficial to some borrowers with less-than-ideal credit, including those with low credit scores, the interest rate on a new loan can sometimes be higher than at local banks and credit unions for people with really good to excellent credit. Be sure to fully evaluate your options before accepting an offer through Upstart.
No cosigners and co-borrowers
Unfortunately, Upstart does not allow for secondary applicants, such as a cosigner or co-borrower, when applying for a personal loan. Loan approvals are based solely on an individual’s creditworthiness and financial profile instead.
Loan availability
Upstart loans are available in all 50 states, but borrowers may face different qualification requirements, loan limits, and other terms depending on where they live.
Each state sets many of the rules for personal loans, and for some borrowers, this means a smaller loan amount is available. Some areas also require higher minimum loan amounts.
Moreover, borrowers in some states are limited to the offers they receive based on Upstart’s partnerships with lenders operating in those locations.
As with any personal loan, it is essential to understand these nuances and the fees charged to ensure the loan you receive is truly the best option for your financial situation.
Eligibility requirements
To be eligible for an Upstart personal loan, there are some basic requirements you must meet:
- Have a verifiable name, birth date, and social security number.
- Be at least 18 years old.
- Have a valid residential address in the United States.
- Have a personal banking account at a U.S. financial institution with a routing number.
- Have a valid email account.
- Have a verifiable source of income
- Meet minimum credit score requirements: 300 credit score in most states; no recent bankruptcies; no accounts currently in collections or delinquent.
Although a minimum credit score of 300 is required, our research shows that borrowers with scores above 600 are much more likely to be approved.
Upstart also states that you need a reasonable debt-to-income ratio (DTI), but does not specify a target range. We have found that you will generally need a DTI of 50% or less for a traditional personal loan; however, anything over 43% is considered high and will significantly reduce your chance of approval.
Credit and debt-to-income requirements will vary by lender.
Final thoughts on Upstart personal loans
Upstart stands out to us as one of the best online platforms for people with various credit types seeking a traditional personal loan. It offers the ability to check your rate without affecting your credit score, a quick approval process, competitive interest rates, and fees.
The biggest downsides include the inability to use a cosigner or co-borrower when you can’t get approved for a loan on your own, and loan terms limited to 3 or 5 years.
Upstart contact information
Individuals interested in using Upstart to obtain a personal loan can find more information about current rates, the application process, and other details through its website or by calling 1-855-438-8778.