Upstart Review: A Comprehensive 2024 Personal Loans Guide

In a world where traditional lending institutions often turn away borrowers with less-than-perfect credit scores, Upstart offers a refreshing alternative.

With its innovative AI-based lending process and consideration of non-traditional factors, Upstart is leveling the playing field for borrowers with fair credit scores.

In this comprehensive Upstart review, we’ll explore the ins and outs of Upstart personal loans in 2023, providing you with all the information you need to decide if this lending platform is the right choice for you.

Key Takeaways

• Upstart offers unsecured personal loans with fixed interest rates and flexible repayment terms.
• Comparing Upstart to other lenders is essential for making an informed financial decision about the most suitable loan option.
• Upstart has Positive customer satisfaction ratings, but borrowers should compare loan terms and their credit report for the best financial decision.

Who Is Upstart?

Upstart was founded by ex-Googlers and is based in San Carlos, CA. They began offering a consumer loan product in May 2014 and have since originated more than $2.7 billion in loans.

Upstart is the first lending platform to utilize artificial intelligence (AI) and machine learning (ML). Because Upstart is a technology company, they also provide services to banks and credit unions as a SaaS.

Introduction to Upstart Personal Loans

Upstart is an online lending platform that utilizes artificial intelligence to connect borrowers with lenders, basing their decisions on factors such as education, employment, and credit history. This unique approach has made Upstart a popular choice among borrowers who may struggle to secure a personal loan through traditional means due to their credit score. 

With minimum loan amounts varying by state, Upstart offers loans as low as $1,000 in most places, and funding can be as quick as one business day. The non-traditional underwriting model used by Upstart allows for a more inclusive approval process, catering to a wider range of borrowers, even those with credit scores as low as 600. 

By considering factors like college major and work history, Upstart is able to approve more applicants than lenders that solely review credit and finances. This innovative approach makes Upstart a valuable option for borrowers with fair credit scores who may be overlooked by other personal loan companies.

Although Upstart personal loans come with numerous benefits, comparing them with other available loan rates and terms is advisable to ensure you’re getting the most suitable deal.

Remember, factors such as your credit score, loan amount, and loan terms can affect the origination fees and interest rates. Subsequently, we’ll examine the procedure for securing an Upstart personal loan, the nature of their loan offerings, and a comparative analysis with other lenders.

Whom Does Upstart Lend To?

Upstart provides a wide range of personal and small business loans for:

• Debt financing
• Paying for personal expenses
• Paying for education
• Starting or expanding a small business

Those are only a few categories that loans can be used for. There doesn’t really seem to be any restrictions on loan use.

The average Upstart customer profile looks like this:

• 688 weighted average FICO score
• $80,764 weighted average income
• 75.7% refinancing credit cards
• 79.1% college-educated

To qualify for a loan, borrowers must meet the following criteria, as stated on Upstart’s website:

1. Be a U.S. citizen.
2. Be at least 18 years old.
3. Not be residing in Iowa or West Virginia.
4. Have a valid email account.
5. Have a verifiable name, date of birth, and Social Security number.
6. Have a full-time job, a full-time job offer with the job starting in six months, a regular part-time job, or another source of regular income.
7. Have a personal banking account at a U.S. financial institution with a routing transit number.
8. Meet Upstart’s minimum credit requirements.
9. If an existing borrower on the Upstart Loan Program, the borrower/applicant must (i) have made on-time payments for their six previous consecutive payments, with no failed payments, [and more].
10. Wait for a period of at least one month after paying off a previous Upstart loan.

Some of the minimum credit requirements mentioned in the eighth point above are:

• You have to have a minimum VantageScore of 620.
• You can’t have a significant change in credit report (a drop in credit score, increased debt, etc.).
• You can’t have bankruptcies or public records on your credit report.
• You can’t have accounts that are currently delinquent.
• You have to have fewer than six inquiries in the last six months.

The above requirements may sound stringent but they help Upstart maintain a statistic of around 91% current or paid-in-full loans.

The Upstart Loan Structure

The interest rates for Upstart personal loans are fixed and range from 5.31% to 35.99%. They offer loan amounts from $1,000 to $50,000, and repayment periods of 36, 60, or 84 months. You can use these loans for diverse purposes, such as clearing credit card debt or financing home improvement projects.

A thorough review of the interest rates and loan terms is crucial to ensure they correspond with your financial objectives and repayment abilities.

Unlike some other lenders, Upstart only offers unsecured loans, meaning borrowers are not required to provide collateral or have a co-signer or joint applicant. This can be an advantage for those who may not have access to such resources.

Additionally, borrowers can prepay their Upstart personal loans without incurring a prepayment penalty, providing added flexibility for those who wish to pay off their loan early.

Upstart does have some fee structures in place. These include charges for:

• Origination fee
• Late payments
• Unsuccessful payment attempts
• Paper copies

However, it’s worth noting that borrowers can adjust their loan payments date once every 12 months during repayment, as long as the new payment date is within 15 days of the original due date. This flexibility can help borrowers better manage their finances and avoid late payment fees.

Evaluating the Efficiency of Upstart's Lending Process

Upstart’s lending process stands out for its efficiency, offering a rapid online application, instant approval, and expedited funding. This streamlined process can be a significant advantage for borrowers who need access to funds quickly.

However, there are some drawbacks to consider, such as restricted repayment periods and relatively high origination fees, which can range from 0% to 12% depending on the loan.

Despite these drawbacks, Upstart’s innovative approach to lending and its focus on non-traditional factors have made it an attractive option for borrowers with fair credit scores who may struggle to secure loans through traditional means. However, those with strong credit ratings should weigh the pros and cons carefully, as they may find better loan terms and interest rates with other lenders.

Can I Invest in Upstart?

Upstart also caters to investors. To invest in Upstart, you must be an accredited investor. An accredited investor is someone who has made at least $200,000 for the previous two years and expects to make the same amount in the current year — or has a $1,000,000 net worth excluding home value.

The investing part of Upstart is peer-to-peer (P2P) lending. Upstart differentiates itself from other P2P lending platforms by including data points such as education and employment. All application information is fed into their AI and ML algorithms to produce probabilities of each applicant’s propensity to repay.

With about 91% of Upstart’s loans in current or fully-paid status, they seem to be doing something right. The remaining status breakdown is as follows:

• 2%: 1 to 16 days late
• 0.6%: 16 to 30 days late
• 1.5%: 30+ days late
• 5.1%: Charge-off

If you’re interested in investing with Upstart, visit www.upstart.com/invest.

Upstart offers some attractive terms for anyone seeking a personal loan or even a small business loan. Their application qualification criteria lean toward the stringent side. But this helps Upstart maintain a high current or fully-paid loan status.

If you want to apply for a loan with Upstart, just visit www.upstart.com.

Comparing Upstart with Other Lenders

When assessing Upstart personal loans, it is important to compare them with other lenders to make an informed financial decision. Key competitors of Upstart include:

• Upgrade
• LendingPoint
• Avant
• Wells Fargo

Each of these lenders provides varying loan terms, interest rates, and credit score requirements, and minimum loan amounts vary. Comprehending their differences can aid in selecting the most suitable personal loan for your unique circumstances.

Upgrade, for example, offers more flexibility in repayment terms and the possibility of a joint or secured loan. Wells Fargo, on the other hand, provides personal loans ranging from $3,000 to $100,000 with terms of 1-7 years and evaluates factors beyond credit score, such as existing relationships with the bank and debt-to-income ratio. LendingPoint offers more repayment term options and smaller loans than Upstart, making it a viable alternative for some borrowers.

For individuals with fair or bad credit looking to consolidate debt or finance a midsize home improvement project, comparing Upgrade and LendingPoint to Upstart may be beneficial. Upgrade, in particular, offers a unique feature for debt consolidation loans, allowing borrowers to directly pay other creditors and receive a discounted rate for using this service.

Remember, comparison shopping is key to finding the best personal loan for your needs.

Assessing Upstart's Customer Satisfaction

Customer satisfaction with Upstart is mixed. Many borrowers praise the ease of the application process and the convenience of the platform. Upstart has a 4.9 out of 5 stars rating on Trustpilot and an A+ rating from the Better Business Bureau, indicating a generally positive reputation among customers.

However, some negative reviews mention issues with bill payment, customer support, and assistance during the Covid-19 pandemic. As with any financial product, it’s essential to carefully review customer feedback and consider both the positive and negative experiences to determine if Upstart personal loans are the right fit for your needs.

Concluding Thoughts on Upstart Personal Loans

Upstart personal loans, also known as upstart loans, offer a unique and innovative approach to lending, making them a viable option for borrowers with low credit scores or thin credit histories.

With fast loan disbursement, flexible utilization of funds, and loan amounts ranging from $1,000 to $50,000, Upstart can be an attractive choice for individuals with fair-to-good credit. In this Upstart personal loans review, we will discuss the key features and benefits of these loans.

Nonetheless, borrowers with higher credit scores might secure more favorable loan terms and interest rates with other lenders. Consequently, comparing personal loan rates, terms, and options, as well as reviewing your credit report, becomes a critical step towards making the most advantageous financial decision for your circumstances.

Summary

In summary, Upstart personal loans provide a unique and inclusive lending platform that caters to borrowers with fair credit scores who may struggle to secure loans through traditional means.

While the innovative AI-based lending process and consideration of non-traditional factors make Upstart an attractive option for some borrowers, those with strong credit ratings should explore other options due to potentially high APRs and origination fees.

As always, comparison shopping is key to finding the personal loan that best meets your financial needs and goals.

Frequently Asked Questions

Is Upstart a trustworthy company?

Upstart has earned an A+ rating from the Better Business Bureau and has a very good rating of 4.9 stars on TrustPilot based on nearly 40,000 reviews. Positive reviews focus largely on the ease of application process and the convenience of Upstart's credit card consolidation loans. Thus, Upstart is a trustworthy company.

Is it hard to get a loan from Upstart?

Overall, it is not particularly difficult to get a loan from Upstart since the company takes a nontraditional approach to underwriting and considers non-conventional variables. Though applicants must meet certain requirements like being 18 years old and having an income of at least $12,000, those without a minimum FICO score may still be accepted.

What factors does Upstart consider when evaluating loan applicants?

Upstart takes into account college major, work history, and credit report when assessing loan applicants, helping them make an informed decision.

What are the repayment terms for Upstart personal loans?

Upstart personal loan repayment terms are available in 36, 60 or 84 months, with fixed payments throughout the loan term.

Can borrowers prepay their Upstart personal loans without penalty?

Yes, borrowers can prepay their Upstart personal loans without penalty.