Upstart Personal Loan Review 2019

By: Heather Hanks Mar. 28, 2019

Upstart is an online personal loan lender that takes into account more than just your credit score. You don’t need to make a lot of money annually to qualify, but the company likes to see your education and future work plans. The company is ideal for younger borrowers who do not have good credit but have a high earning potential.

You can use your personal loan for a variety of purposes, such as debt consolidation. You can also use it to plan a vacation or to pay off medical bills. Here’s everything you need to know about Upstart personal loans and whether or not you’re a good candidate for this type of loan.

Upstart Personal Loan Review 2019

on Upstart website

What is Upstart?

Upstart is an online lending platform that partners with banks to provide personal loans from $1,000 to $50,000*. Upstart goes beyond traditional lending metrics to help you find financing that considers your education and experience.

According to the website, the company’s mission is to provide effortless credit. They believe that money is an important part of life and they know that not everyone was blessed with wealth. Because of this, many people need to borrow but the price can be expensive. Upstart was founded by ex-Googlers, according to the website. They are the first online lending platform to marry machine learning and artificial intelligence to make the loan process easier. The company claims that they have a strong credit performance and are one of the highest rated lending companies.

Upstart is unique because they use a direct to consumer lending platform. They also provide technology to other lending platforms, such as banks and credit unions. They have a program called Powered By Upstart that features a software as a service. The company claims that they have distributed approximately $3.2 billion in loans and 60% of loans are automated. Upstart claims that the loan process needs to change. Unlike other lenders, Upstart does not use only your credit score to determine your eligibility and interest rate. They look at other features as well.

Upstart offers personal loans that range from $1,000 to $50,000*

Upstart have three and five-year terms **

Upstart APR’s range from 6.46% to 35.99%**

Personal loans are unique because you can use them however you want. They can be used to pay off credit card debt, to consolidate your loans, or to fund a major purchase. Some people even use them to fund a vacation.

The company states that they are ahead of their time because they use data other than your credit score to determine your loan terms and eligibility. They claim that using your credit score alone to determine your risk is outdated and not a good way to calculate your qualifications. Instead, Upstart uses your educational status and employment history to help determine your rates and loan terms. They also look at your financial activity in your bank account as well as your spending habits to make these decisions. Because of this, Upstart is a good company to work with if you are new to credit or you have less than perfect credit.

Upstart uses technology that learns and improves on its own to give you a better experience and fairly determine your creditworthiness. This technology is responsible for creating lower credit costs. Upstart is one of the first companies to take into account more than just your credit score and break out of the traditional habits that most banks and lenders have.

What Does Upstart Offer?

Upstart offers personal loans to those with a credit score of at least 620. They are an ideal company to work with if you have never borrowed credit before or if you’re a college student. This is because they reward you for having a high earning potential degree and employment status. Other lenders will look at your credit score only to determine your rates. As mentioned above, you can use personal loans anyway you'd like.

Here are some of the key highlights of a personal loan from Upstart:

Loan amounts range from $1,000 to $50,000*

Personal loans are distributed within one day while educational loans may take up to three days

You must have a minimum credit score of 620 to qualify

APR’s depend on several factors and range from 6.46% to 35.99%**

Repayment options are over three or five years, no prepayment fees so you can pay off the loan as fast as you'd like**

You do not need to have a credit history to qualify

Origination fees range from 0% to 8%, late fees are 5% of the late amount or $15, whichever is greater

The company will do a soft credit check first followed by a hard credit check once you sign.

You must have a minimum annual income of $12,000 and a maximum debt-to-income ratio of 45%

The company uses more than just your credit score to determine your eligibility. They will also look at your college degrees, your area of study, and your job history. Having a high-earning college degree and a strong employment history can work in your favor when obtaining a loan from Upstart. To qualify, the company requires you to have a minimum credit score of 620 if you have credit history. They also want to see that you have no delinquent loans or recent bankruptcies. You will need fewer than six inquiries on your credit report within the past six months. This does not include inquiries related to car loans.

Upstart is based in San Carlos, CA. They were founded in 2012 and provide services in 49 states as well as Washington, DC. They can fund your loan within one day after approval. This does not include educational expenses, which typically take up to three days. Students may need to provide additional documents to qualify, such as their SAT scores and college transcripts. The company does not charge a prepayment fee, which means that you can save money on your interest rate by paying off your loan early. They will hit you with a 5% or $15 late fee on all late payments.

As you can see, there are a variety of ways you can use your personal loan from Upstart. The company requires you to have an active bank account with a working checking account. They would also like to see that you have been active within this bank account recently. You will need a credit score of 620 to apply and you must be 18 years of age. The company allows joint applications, which means that you can apply with your spouse.

● Credit card
● Student loans
● Debt consolidation
● Medical bills
● Bills or rent
● Home Improvement renovations
● Relocation
● Taxes
● Wedding
● Vacation
● Purchasing a car or another large purchase
● College or grad school
● A course or boot camp
● To start or expand a business
● To Help out a friend or family member
● To use the funds for something else

They may report your activity to one of the three major credit reporting bureaus. It's a good idea to inquire about this if you're interested in boosting your credit score. Making on-time payments is a good way to practice good financial behavior that can positively affect your credit. Lastly, the company has a debt to income ratio of 45, which is lower than other companies. If you have a high amount of debt, then Upstart recommends that you consolidate your loans for one small monthly payment with a better interest rate.

Upstart may want to see your area of study. This can help determine your financial eligibility depending on your degree. Applicants with a strong credit score, a good degree, and a solid employment background will be offered the best rates. Don't let this discourage you if you have less than perfect credit. The company wants to work with those who are just starting out in the credit world. If you are a college student or you have not yet taken out of a line of credit, and don't be afraid to contact Upstart for a loan.

It's easy to apply for a personal loan at Upstart. Because they are an online lender, they do all of their business on one platform. You can also call them toll-free to speak to a representative over the phone. The application process takes approximately two minutes, according to the website.

You will need the following documents on hand when you apply: A driver's license, state ID, or another form of identification, Recent pay stubs, Your proof of income, Proof of citizenship or residency if not from the US, An active invalid checking account, Paperwork to prove your employment status.

How to apply Upstart

1

Visit the company's website and answer a few questions about yourself.

This allows you to check your rate to determine what you're eligible for. You will be asked about the school you went to as well as the years you attended. You'll also be asked the year you graduated, the degree in which you graduated with, and your current job status. The company will want to know where you work as well as how much money you make a year.

2

Next, you can accept your terms and receive your funds the next business day***.

After your application is processed, you'll be offered a loan term. If you accept, then your loan contract will begin and your funds will be distributed the next day. This information should tell you your loan amount, your APR, and your loan term. You’ll also be able to see which account your funds will be distributed into.

3

The final step is to set up your auto pay and forget about your repayments dates.

Setting up an auto loan is a good idea because then you won’t be hit with a late fee. You will learn your repayment amount, the dates in which you will be charged, and for how long. Contact Upstart anytime you need to change this information.

Upstart Pros and Cons

Upstart does not require you to be rich to be approved for a loan. You only need an annual income of $12,000 and a credit score of 620. These terms are ideal for college students or those who are just starting out. One of the advantages of working with Upstart is that they look at your employment history and college education to determine your creditworthiness. This is beneficial if you have less than perfect credit or need to take out your very first loan.

On the other hand, you may experience higher than average APR rates in exchange for fast funding and less than perfect credit. The company also has other fees to look out for, including a high origination fee as well as late fees. Their low debt to income ratio means that their services are better suited for someone who does not have debt.

Upstart PROS

  • The company takes into account other data besides your credit score when approving you for a loan. For example, they look at your education and employment status in addition to your credit score. This works to your benefit if you have a low credit score or are new to the credit world. Upstart also focuses on your SAT scores and the area in which your degree is in. If you have a degree with a high earning potential, then you may be rewarded with better rates. The company gives your profile an overall grade. Then they use this grade to determine how much you can borrow as well as your interest rate.
  • At Upstart, you have several repayment options. You can pay back your loan every month or every two weeks*. There's also no prepayment penalty if you choose to pay off your loan early to save on interest. The company is also flexible in regards to hardships. If you suddenly lose your job or cannot make a payment, then you'll need to contact the company and they will work with you. In some cases, you may be offered a new payment plan. The company can at least change your payment date for one that works with your financial needs.
  • There are no check fees. This is one of the many benefits to working with Upstart because other companies charge a fee for writing checks.
  • In most cases, you should expect to see your funds within the next business day***. Most borrowers are happy with the amount of time it takes to receive their funds.
  • You only need an annual income of $12,000 to quality.
  • You do not need credit history to qualify. Many companies like to see that you have a credit history of several years before applying.
  • The company uses a unique online platform to communicate with you and do business. Because of this, you can always expect to reach someone at the company. Communicate with them via email or through their toll-free number any time of the day. You can also check your account status via the online platform anytime you want. You can use this online platform to change your scheduled payment date or cancel payment dates. You can also use it to change your recurring payment amounts.
  • The company is more flexible than other companies in terms of their repayment options. They will work with you if you fall under hard times or need to change the terms of your loan.

Upstart CONS

  • They have a debt to income ratio requirement of 45%, which is lower than other companies. This means that you will need low debt to qualify for a loan.
  • The company charges several fees, such as an origination fee of 0% to 8% and a late fee of 5% or $15 (whichever is more). Keep in mind that your origination fee is deducted from your loans before you get them.
  • There is also a fee for insufficient funds. This means that you will be charged if you overdraw your account or do not have enough to make payments. You will be charged $15 for every check returned to you if it bounces.
  • It may take several days for your loan application to process. Most Upstart customers are happy with the loan process, but some complain that it takes several days to get started. On the other hand, many companies offer same-day funding if you qualify. The company states that you should receive your funds the next business day*** if you're applying for a personal loan.
  • You need an active checking account and a credit score of 620 to be eligible. This is higher than other companies who may work with you if your credit score is below 600.
*Your loan will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5,001. The minimum loan amount in GA is $3,100.
**The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21% and 36 monthly payments per $1,000 borrowed. There is no down payment and no repayment penalty. Average APR is calculated based on 3-year rates offered in the last one month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
***If you accept your loan by 5 pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.

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