Upstart Personal loans: Upstart is a direct-to-consumer lending platform online that utilizes the power of machine learning and artificial intelligence to streamline the loan pricing and funding process. It offers loans ranging from $1,000 up to $50,000, with interest rates as high as 35.99%, paid over 3 or 5 years. The company was established by former Google employees. With a focus on technology, it has grown into a major player in the online lending sphere over the last several years. To date, Upstart has funded $2 billion in loans, but the company’s impressive numbers do not mean it’s the best fit for all borrowers.
Borrowers should check out some Upstart competitors before signing on the dotted line. This is to ensure they are getting the most affordable interest rate for their credit history. Also the most cost-effective loan in terms of origination fees and other charges. Read on to learn how upstart compare with it’ competitors.
Upstart Personal Loan at a Glance
This can be used for a variety of purposes, including debt consolidation, medical expenses, home improvements and college tuition. Most borrowers use their funds to consolidate debt, according to the company.
Upstart’s underwriting helps younger applicants or others who have thin or no credit history but high earning potential qualify for a loan, according to a company spokesperson. The company assesses factors such as college degrees, area of study and job history when reviewing loan applications.
For applicants with a credit history, Upstart requires a minimum credit score of 620, no recent bankruptcies or delinquent loans and fewer than six inquiries on a credit report in the past six months, not including inquiries related to student loans, car loans or mortgages.
Upstart provides quick loans funded within one day, except for loans for educational expenses, which are subject to a three-day waiting period. Students may need to supply additional documents, such as college transcripts.
Direct Payment to Creditors
For personal loans used to pay off credit cards, Upstart sends your loan proceeds to your credit card issuers to simplify the debt consolidation process.
Borrowers can temporarily suspend payments in the event of economic hardship (such as a job loss), subject to Upstart’s approval.
Origination fee: 0.0% – 8.0%.
Late fee: 5% of past due amount or $15, whichever is greater.
How to qualify
Minimum credit score: 620.
Your minimum credit history: None.
Minimum annual income: $12,000.
Must have a full-time job or offer starting in six months (except if accepted to a partner boot camp that supports funding for student tuition and seeking employment after graduation), a regular part-time job or another source of regular income.
Maximum debt-to-income ratio: 45%.
Loans aren’t available in West Virginia or Iowa.
Upstart Competitors for Personal Loans
Rates (APR) – 5.99% – 20.01%
Loan Term – 2 – 7 years
Loan Amounts – $5,000 – $100,000
Although SoFi is most prominently known for its student loan refinance product, the online lender also offers personal loans to qualified borrowers.
Through SoFi, an individual may qualify for a personal loan of up to $100,000, which is more than Upstart’s loan limit. Interest rates for a SoFi personal loan are also considerably lower than Upstart, ranging from 5.99% to 20.01% with a 0.25% discount included for automatic payments.
Borrowers pay no origination fees with a SoFi personal loan, unlike Upstart, which charges an origination fee, often rolled into the total loan amount.
Both Upstart and SoFi evaluate a borrower’s ability to repay the loan based on credit history and score, education history and job experience. SoFi stands out as an online personal loan lender because of its added features offered to borrowers. These include social groups, educational resources, and a referral program.
Rates (APR) – 5.99% – 24.99%
Loan Terms – 24 – 60 months
Loan Amounts – $5,000 – $35,000
California-based Payoff is a financial services and technology company, which is focused on helping consumers get out of high-interest credit card debt.
The company offers the Payoff Loan in amounts ranging from $5,000 to $35,000, which is more limited than Upstart. The interest rates are comparable to Upstart, ranging from 5.99% to 24.99%, and repayment terms ranging from 24 – 60 months.
Payoff personal loans have a minimum credit score of 640.
Rates (APR) – 4.99% – 16.79%
Loan Terms – 24 – 144 months
Loan Amounts – $5,000 – $100,000
Lightstream, a division of SunTrust Bank, offers personal loans online.
The lender provides loan amounts between $5,000 and $100,000, higher than Upstart, and fixed interest rates of between 4.99% and 16.79%, which are lower than Upstart’s rates.
LightStream also offers a 0.50% discount on the interest rate when borrowers set up automatic payments. Loan terms can be a minimum of 24 months or up to a maximum of 144 months, which offers more flexibility in repayment than Upstart.
There are no origination fees with a Lightstream personal loan, unlike Upstart, and credit evaluations include a look at assets, credit history, income, and payment history.
Upstart personal loans may be a viable option for borrowers in some scenarios, but there are other alternatives to get financing for major expenses or debt consolidation.