Upstart Personal Loans: 2024 Review

Upstart uses a nontraditional underwriting method to help more borrowers qualify and get a low rate, even with imperfect credit.

Pros

• Accepts borrowers new to credit.
• Fast funding.
• Option to change your payment date.
• Option to pre-qualify with a soft credit check.
• Seven-day customer service availability.

Cons

• May charge origination fee.
• No joint, co-signed or secured loans.
• No mobile app to manage loan.
• Only two repayment term options.

Full Review

Upstart is an online lending platform that connects borrowers with banks and credit unions to fund personal Loans offered through Upstart are a fast but somewhat inflexible financing option. Approval and funding times are some of the fastest among lenders; however, Upstart doesn’t offer joint, co-signed or secured loans. The online lending platform also has only two repayment term options.

Upstart differentiates itself from other online lenders with its underwriting model. The company uses artificial intelligence and nontraditional data like college education, job history and residence to qualify borrowers. More traditional lenders, like banks, focus almost exclusively on a borrower’s credit.

Upstart personal loans at a glance

• Disclosure from Upstart

Where Upstart personal loans stand out

Alternative data use: Many personal loan lenders review primarily credit and income information to make an application decision, but Upstart includes details like college major and work history in borrower evaluations. The lending platform says its nontraditional underwriting model helps approve more applicants than lenders that review credit and finances only.

Fast funding: Upstart says most borrowers receive an instant approval decision after applying. Once approved, the company says it funds loans as fast as one business day. Few of Upstart’s competitors boast instant application approval.

Soft credit check to pre-qualify: Upstart offers pre-qualification on its website, so borrowers can check their potential loan offers without undergoing a hard credit pull. Because there’s no impact to your credit score, you can pre-qualify with multiple lenders to find the best offer.

Change your payment date: While borrowers cannot pick their initial due dates, they can change the date one time every 12 months during repayment, as long as the new payment date is within 15 days of the original due date.

Transparency and customer service: Upstart’s website includes information such as borrowing amounts, rates and terms that can help a prospective borrower easily assess the loan before pre-qualifying. The website includes a FAQ, and customer service representatives are available to answer questions seven days a week.

Where Upstart personal loans fall short

Limited repayment terms: Borrowers can choose a three- or five-year repayment term. Those same terms are offered by a few other online lenders, but they’re inflexible compared to lenders with as many as five or six repayment term options. The more repayment terms you have to choose from, the more control you have over monthly payments and interest costs.

Origination fee: Some lenders that use Upstart’s online lending platform charge an orgination fee. which is common with personal loans and is included in the loan’s annual percentage rate. However, Upstart’s maximum origination fee of 12% is comparatively high. Borrowers can choose to have the fee taken from the loan before funding, reducing the loan amount, or added to the loan amount and repaid as part of the loan.

For example, a 12% origination fee on a $10,000 loan would either reduce the loan amount to $8,800 or increase it to $11,200.

No mobile app to manage a loan: Upstart doesn’t have a mobile app where borrowers can make loan payments, view their payment history and see their latest credit score. Mobile apps are a common offering, especially from tech-forward lenders.

No co-signed, joint or secured loan options: Upstart offers unsecured loans only. Adding a co-signer, co-borrower or securing a loan can help borrowers who may not otherwise qualify get a personal loan.

Do you qualify for an Upstart personal loan?

Upstart’s nontraditional approach to underwriting means there are few credit-related requirements to get a personal loan. Upstart says those with all types of credit profiles and income levels may qualify.

To be eligible for an Upstart personal loan, you must:

• Be a U.S. citizen or permanent resident.
• Be at least 18 in most states.
• Have a valid email address and Social Security number.
• Have a full-time job or be starting one within six months.
• Have a bank account at a financial institution with a routing number.
• Have no bankruptcies in the last 12 months.
• Have no current delinquent accounts on your credit reports.
• Have fewer than six hard inquiries on your credit report in the last six months, excluding student, auto and mortgage loans.

Here are the lender’s basic requirements to qualify for a personal loan. (Meeting these requirements doesn’t guarantee approval.)

• Minimum credit score: 300 in most states, however, the lender says it accepts applicants with insufficient credit history to produce a FICO score.
• Minimum annual income: $12,000. This lender accepts income from employment, alimony, retirement, child support, Social Security payments, disability benefits and self-employment.

Before you apply

• Check your credit. You can can get credit report.
• Doing so will help you spot and fix any errors before you apply.
• Calculate your monthly payments. Use a personal loan calculator to determine what APR and repayment term you’d need to get a loan with affordable monthly payments.
• Make a plan to repay the loan. Review your budget to see how the loan’s monthly payments impact your cash flow. If you have to cut other expenses to repay the loan, it’s better to know that before you borrow.
• Gather your documents. Upstart may require proof of income, which can be a W-2 or pay stub, as well as a Social Security number. Having these documents handy can speed up the application process.

How to apply for an Upstart personal loan

Upstart’s pre-qualification process may take longer to complete than other lenders’ because it involves more questions about employment, education and income.

Here are the steps to apply for an Upstart loan.

1. pre qualify on Upstart’s website. Choose “Check My Rate” and then “Personal Loan” to start pre-qualifying. Enter your desired loan amount and loan purpose, plus some personal information like your name, address, email address and phone number. You’ll then add information about your income sources and how much money you have in your bank and investment accounts. Finally, you’ll set up an account and check your rate. There’s no hard credit pull at this stage.
2. Preview loan offers and choose one. If you pre-qualify, you’ll be shown multiple offers including the loan amount, rate, repayment term, monthly payment and an origination fee if one is included. Choose the offer with affordable monthly payments and reasonable interest costs.
3. Submit an application. Once you’ve chosen an offer, you’ll submit a formal application, which may require proof of income, such as a W-2, tax documents and pay stubs. Gather these before you apply to speed up the application.
4. Make a plan to repay the loan. Upstart reports payments to all three major credit bureaus. so on-time payments will help build your credit score, but missed payments will hurt it. Setting up automatic payments and keeping an eye on your budget are two ways to manage your loan.