Upstart Review – A Personal Loan Made Easier
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Upstart is a leading online lender, helping look beyond consumer’s credit scores to help more people get the personal loan they need.
8.5/10
Cost
8.5/10
Features
9/10
Ease of use
8/10
Services
8.5/10
Whether you’re looking to pay down credit card debt, kick off a home improvement project, or tackle your student loans, a personal loan might be a great option. Refinancing with a personal loan can often help lower your monthly payments similarly to other forms of debt consolidation, with more competitive loan terms, interest rates, and late fees too.
Perusing your loan options online allows you to compare different lenders much more easily. From the maximum loan amount offered to the minimum credit score required to apply or the loan's annual percentage rate (APR), comparing one online lender to another allows you to determine what value each loan offers before making a choice.
One lender you’re likely to come across in your search for the perfect personal loan is Upstart. Upstart advertises “fair and fast” personal loans for consumers — and prides itself on looking further than your credit score to determine eligibility for its platform. Learn more about the ins and outs of an Upstart personal loan below.
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What is Upstart?
Upstart is an online lender providing personal loans that range from $1,000 to $50,000. These loans are perfectly sized for credit card consolidation, home improvement projects, medical procedures, moving costs, and wedding loans.
Upstart features a powerful artificial intelligence (AI) platform that goes beyond your FICO score or credit report to determine your loan funds eligibility. The AI system underpinning the platform was founded by two developers who used to work at Google.
Because Upstart’s model is more accurate than other forms of credit inquiry, it approves more borrowers and averages lower rates for consumers. This has huge implications for borrowers looking to refinance since saving on APR and being approved for a better loan ultimately puts more money in your pocket over the lifetime of your loan.
Personal loans with low fixed rates
- No hidden fees
- Next day funds
- Borrow $1,000 - $50,000
- No pre-payment penalty
- Checking your rate won't affect your credit score
How does Upstart work?
Getting started with Upstart is simple and straightforward. Best of all, your initial check won’t affect your credit score (although if you go through taking out a loan, there will be a hard inquiry that may damage your credit). It all starts with selecting from a few goals from Upstart’s website, such as paying off your credit cards, consolidating debt, refinancing your car loan, or something else.
After you’ve selected what you intend to use your loan for, Upstart will ask you how much you’d like to borrow. You’ll need at least to meet the minimum loan amount of $1,000; however, Upstart also offers loans of up to $50,000.
After you’ve clicked next, you’ll reiterate how you intend to use your loan. Upstart gets a little bit more granular in this portion of your application. For example, if you plan to refinance, you’ll choose between credit cards, debt consolidation, or student loans. You may also want to select that you’re taking out a personal loan for a large purchase like a car or to help with personal expenses like taxes, a wedding, or a vacation.
You’ll then enter personal information, starting with your first and last name.
You’ll also be asked to provide your birthday information. Upstart makes sure that you know that this information is kept secure using 256-bit encryption. You’ll also input your mailing address, email address, phone number, and the highest level of education you’ve completed.
Upstart will ask for additional information about the college you attended, including your study area and year you graduated. You’ll then put in some information about your primary source of income, whether from a salaried position, hourly job, or another option like independent contractor work or a sole proprietorship.
This section details your income in more detail, and you can even add more information if you have a side hustle that provides you with additional information. While everything in this section of the application is relatively straightforward, if you haven’t considered what month and year you started at your position, you may have to cross-reference some old emails or your LinkedIn profile to get this information.
After inputting information about your income, you will also be asked to enter information about how much money you have in your checking, savings, and investment accounts. You’ll then answer a yes or no question about whether or not you’ve taken out any additional loans in the previous three months.
Finally, you’ll create a password for your account (which will be linked to the email address you provided earlier). At this point, you can agree to check your rate and get more information about the loans and interest rates you may qualify for. Upstart will then run a soft pull of your credit report to determine how you fit in with their AI overall and what loan terms you may qualify for.
How much does Upstart cost?
While applying for a loan with Upstart is free, if you do decide to take a loan out with them as your lender, there are a few different fees you can expect to pay. For starters, you’ll pay a one-time origination fee when you take your loan out, which is how the company makes money. Upstart charges an origination fee of 0% to 12% of the total loan amount. This will be deducted as part of the loan before your proceeds hit your account.
Other potential fees
While everyone pays an origination fee, there are a few other fees you may encounter when using Upstart. For example, if you make a late payment, you’ll pay either 5% of the past-due amount or $15, whichever is higher. If an ACH or check payment is returned to you, you’ll also be charged a fee of $15 each time it happens.
Personal loans with low fixed rates
- No hidden fees
- Next day funds
- Borrow $1,000 - $50,000
- No pre-payment penalty
- Checking your rate won't affect your credit score
Upstart features
Upstart is a leading online lender, and one of those reasons is the streamlined features it offers consumers. Here’s a quick overview of some of the best features Upstart offers.
Better approval odds
Because Upstart uses AI in addition to traditional credit score techniques, most consumers are approved with much better loan terms through Upstart than they would be from another lender. This is a great option if you don’t want to deal with co-signers but want to get a good rate.
Fast
Fast funding is a major benefit of using Upstart as your loan provider. Once you’ve gotten your rate, read over, and accepted your loan information, you’ll generally get the funds of your loan disbursed to you in as little as one business day. This means you can work on putting your loan to good use and making the financial change you’re looking for now.
No prepayment penalty
In many loan reviews, you may think everything looks good until you realize you can’t prepay your loan balance. Upstart’s repayment terms allow for extra payments in addition to your repayment schedule with no penalties. You can pay off your new loan quicker than if you’d gone with a lender with prepayment penalties.
Who is Upstart best for?
Upstart has a lot of features that make it great for most consumers. That being said, a few people get even more advantages from using the platform. Here are two different types of borrowers who may get the most from Upstart’s approach as an online lender.
Borrowers with poor credit
If you don’t have the best credit, you’ll likely get a much better rate from Upstart than from a different lender. Because Upstart uses an AI-fueled approach to determining eligibility, it looks at a few dimensions of your financial picture. As a result, you’ll likely get a lower APR rate and a higher approval amount through Upstart rather than a traditional lender.
Borrowers who want to consolidate
Upstart is a great option if you have several different debts that you’re looking to consolidate through your loan. You can save money by getting a lower APR through Upstart—not to mention that Upstart is willing to deal with creditors for you. Consolidating one loan through Upstart will give you peace of mind and save you money, too.
Who shouldn’t use Upstart?
While Upstart has a lot of perks, there are certain situations and scenarios where it makes sense to seek out a different kind of lender. Here are a few people who may want to steer clear of Upstart.
Borrowers who don’t have great earning potential
If your income isn’t high enough, taking out a personal loan from any lender can be a bit dicier. If you don’t have great earning potential, you may get a higher rate since you could pose more risk than another borrower with a higher annual income. Make sure to look at your income and consider whether a loan fits into your overall budget in terms of affordability before you commit to a loan from any lender, including Upstart.
Borrowers who don't like an origination fee
Being charged an origination fee can make your loan more expensive, even if it’s got an attractive rate. As such, you need to think about whether or not that origination fee is something you can afford. It might be worth paying a small premium for extra funds for people looking to consolidate their debt or get money quickly. That being said, taking on another 5% or 8% of your loan’s overall cost can add up quickly, depending on the size of your loan.
Pros and cons
Pros
- Fast funding. Speed is one of the greatest benefits of using an online lender like Upstart. The ability to get your money to your bank account in one business day means that if you need money fast and qualify through Upstart’s platform, you’ll likely have the money you need in just a few days.
- Easy-to-use platform. While Upstart’s application process is a bit more detailed than other options on the internet, its thoroughness doesn’t make it difficult to navigate. While it might take you closer to 10 minutes to complete your loan application on Upstart, it’s a straightforward and clear process thanks to a clean user interface.
- Better approval odds. The fact that Upstart uses proprietary AI to approve borrowers means that they serve almost a quarter more consumers than traditional lenders using other credit reporting and approval models. This means that if you have poor credit or are looking to maximize your high credit score, Upstart will most certainly be a competitive offer.
Cons
- Origination fees. As has been mentioned, the origination fees Upstart charges can be cost-prohibitive depending on your financial situation and what rate you’re quoted. While the low-end of the 0%-12% range is certainly reasonable but if you’re getting charged 7% or 10% on a $50,000 loan from Upstart that means that you’ll wind up paying an additional $3,500 to $5,000 for the loan.
- Higher minimum loan amounts in some states. Upstart advertises a $1,000 minimum loan amount; however, in some states, the minimum loan amount is quite a bit higher. For example, in Ohio, the minimum is $6,000 while in Massachusetts you’ll need to take out a loan of at least $7,000 to qualify.
- No co-signing. While not everyone is looking to have a co-borrower or co-signer on a loan, if that is something you’re interested in you’ll need to keep looking.
Personal loans with low fixed rates
- No hidden fees
- Next day funds
- Borrow $1,000 - $50,000
- No pre-payment penalty
- Checking your rate won't affect your credit score
Upstart vs. Lending Club vs. Prosper
Platform | Annual Percentage Rate (APR) | Loan amount | Loan term |
Upstart | 7.8% to 35.99% | $1,000 to $50,000 | 36 to 60 months |
LendingClub | 8.98% to 35.99% | $1,000 to $40,000 | 24 to 60 months |
Prosper | 8.99% to 35.99% | $2,000 to $50,000 | 24 to 60 months |
LendingClub
LendingClub's maximum loan amount is $10,000 less than Upstart, and its base APR is higher than Upstart, meaning Upstart may be the option for people looking for larger loans at low interest.
Prosper
Prosper has identical APRs compared to Upstart, although Upstart is a bit better on the low end. That being said, Upstart has lower minimum loan amounts, so for many people, Upstart is going to be the better option between the two online lenders.
FAQs
Do I qualify for a loan?
Most likely! According to Upstart’s website, to qualify for a loan through their platform you must have a valid email address, live in one of the 50 states (except West Virginia or Iowa), be at least 18 years or older, have a full-time job, have a bank account, and be able to prove your identity and street address.
Will getting my rate hurt my credit?
No. When you fill out the application and get a rate quote Upstart will only perform a soft credit inquiry, meaning that your credit won’t be negatively impacted by the inquiry. That being said, you will have to undergo a hard credit check when you officially apply to use Upstart.
Can I get a second loan from Upstart?
Yes, as long as you meet certain criteria. Upstart’s website states that to be eligible to receive a second loan, you’ll need to have made on-time payments for at least six previous consecutive months, have only one outstanding loan through Upstart and have no currently past due payment.
Is Upstart legit?
Nowadays, some of the best personal loans are offered by online platforms instead of through traditional banks. While borrowers can certainly get a loan from an institution where they also have a bank account, many times, the application process is much more streamlined on an online lending platform than it is at a traditional bank. Upstart is a leading online lender that helps look beyond consumers’ credit scores to help more people get the personal loans they need.
While you’ll be charged an origination fee with Upstart, the likelihood is high that your APR will be lower with their platform than through an alternative lender. This could mean that the costs come out in the wash, but it’s still a good idea to look at your finances and ensure that Upstart fits your needs and budget well. Upstart is a good option to consider if you have a good income and want to consolidate your debt or get a better loan with a lower credit score. Ultimately, the choice is up to you, but with features like a simple application process and AI-powered tools to get you the best rates you can qualify for, it’s easy to see why Upstart is such a popular option online.
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Writer
Brent Ervin-Eickhoff is a Chicago-based writer, stage director, and filmmaker with a background in digital marketing and content creation. In addition to Joy Wallet, Brent has written for Complex, Volkswagen, HowlRound, Picture this Post, and Third Coast Review, among others. He currently serves as the Associate Director of Marketing for Content Creation at Court Theatre at the University of Chicago. Brent graduated from Ball State University with Academic Honors in Writing.
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