Upgrade personal loans are a strong option for borrowers looking to consolidate high-interest debt and build credit.
Pros
- Multiple rate discounts.
- Secured and joint loans.
- Mobile app to manage loan payments.
- Direct payment to creditors with debt consolidation loans.
- Long repayment terms on home improvement loans.
Cons
- Origination fee.
- No option to choose initial payment date.
Full Review
Upgrade personal loans are good for borrowers with low credit scores looking to consolidate debt and build credit at the same time.
Though Upgrade lends to borrowers across the credit spectrum, the lender has looser minimum credit score, credit history and debt to income ratio requirements than lenders that seek borrowers with good or excellent credit scores (690 or higher).
Its softer borrowing requirements make some of its features such as rate discounts, direct payment to creditors on debt consolidation loans and extra long repayment terms on home improvement loans — stand out even more. Such perks are rare among bad-credit lenders (that accept credit scores of 629 or lower).
Upgrade personal loans at a glance
| Minimum credit score | 560. |
| APR | 8.49% – 35.99%. |
| Fees | Origination: 1.85% to 9.99%.Late fee: $10.Failed payment fee: $10. |
| Loan amount | $1,000 to $50,000. |
| Repayment terms | 3 to 5 years. 7 years on some larger loans. |
| Time to fund after approval | 1 day. |
| Loan availability | Loans available in all 50 states and Washington, D.C. |
- Disclosure from Upgrade
Where Upgrade personal loans stand out
Multiple rate discounts: Upgrade offers more opportunities to lower your annual percentage rates than most of its competitors.
- Autopay discount: The lender offers a 0.5 percentage point discount for setting up automatic loan payments. Some lenders offer an autopay discount between 0.25 and 0.5 percentage points. This is a low-effort way to lower your APR slightly.
- Direct pay discount: For debt consolidation, Upgrade offers a rate reduction of 1 to 3 percentage points when you have the lender pay off your debts directly. You must have at least half the loan funds sent to other creditors to get the discount. Not all lenders offer direct payment to creditors, which simplifies the consolidation process, and a discount for using the feature is unique.
- Rewards checking discount: Upgrade says customers with multiple Upgrade products (such as a checking account) may get up to 20% off of their personal loan rate. So if you qualify for a 30% APR, your rate could be as low as 24%.
Secured and joint loans: Borrowers can get a secured or joint loans through Upgrade. These loan types may be easier to qualify for or come with a lower rate. Upgrade accepts a vehicle as collateral and says your secured loan rate could be 1 to 10 percentage points lower than an unsecured loan.
Mobile app and credit assistance: Upgrade has a well-rated mobile app where borrowers can manage loan payments. The lender also offers free credit score monitoring, a summary of your latest credit report, a credit score simulator and the ability to track your score history. Some lenders offer a mobile app, but credit report summaries and a score simulator are rare perks.
Longer repayment term for larger loans: Upgrade’s repayment terms of three to five years are common with personal loans, but the lender offers an additional seven-year repayment term for home improvement loans and loans over $30,000. Only a few lenders offer longer home improvement loan repayment terms.
Where Upgrade personal loans fall short
Charges origination fee: Upgrade charges an origination fee from 1.85% to 9.99%. The lender takes this fee from the loan amount before you receive the funds, reducing your total loan amount. Be sure the loan amount is still enough to cover your expense once the fee is applied. Origination fees can have a significant impact on the loan’s affordability because they increase your APR and may lower your loan amount or raise your monthly payments.
No option to choose payment date: When you get an Upgrade personal loan, the lender assigns you a repayment date. Many lenders let borrowers choose a repayment date that works best with their pay schedule. Instead, Upgrade borrowers can move their payment date within 15 days before or after their given due date. You can do this as often as you want in the app.
Do you qualify for an Upgrade personal loan?
Upgrade’s borrower requirements are softer than some other lenders — a minimum credit score of 560 is one of the lowest among personal loan lenders — but the average borrower has a higher credit score and relatively strong income.
Here’s what you need to be eligible to apply:
- U.S. citizen or permanent resident, or living in the U.S. on a valid visa.
- At least 18 years old in most states.
- A verifiable bank account.
- A valid email address.
Here’s what you need to qualify for an Upgrade personal loan. (Meeting these requirements doesn’t guarantee approval.)
- Minimum credit score: 560. Upgrade uses FICO score version 9 from TransUnion.
- Minimum number of accounts on credit history: One account.
- Minimum length of credit history: Two years.
- Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.
- Minimum annual income: None; this lender accepts income from a partner, alimony, retirement, child support, Social Security payments and other sources.
Here are details about Upgrade’s average borrower, according to the lender:
- Average credit score: 672.
- Average annual income: $80,000.
- Average loan amount: $11,500.
- Average loan term: Five years.
- Most common loan purpose: Credit card refinancing and debt consolidation.
Before you apply
- Check your credit. before applying personal loan.
- Calculate your monthly payments. Use a caluculate loan 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 in order to repay the loan, it’s better to know that before you borrow.
- Gather your documents. Upgrade may require proof of income, which can be a W-2, pay stubs or tax documents. Having these documents handy can speed the application process.
How to apply for an Upgrade personal loan
Here are the steps to apply for an Upgrade loan.
- Pre-qualify. on Upgrade’s website. Start by entering a loan amount and purpose on Upgrade’s website to get to the lender’s pre-qualify form. Next, choose a joint or individual application and provide basic information like your name, address, birth date and income. Finally, create an account with your email and a password and enter your Social Security number. There’s no hard credit inquiry at this stage.
- Preview loan offers. Qualified borrowers are shown multiple offers, including loan amounts, rates, repayment terms and monthly payments. Choose the offer that fits your budget to start a formal.
- Finish applying. The application may require certain documents, like W-2s and pay stubs to confirm the information you gave during pre-qualification. Upgrade will also do a hard credit check when you apply, so your credit score will temporarily dip.
- Get approved and receive your funds. It typically takes Upgrade one to a few business days to approve applications. The lender says it sends loan funds the day after approval. This process may take longer if you’re having Upgrade directly pay off other debts.
- Make a plan to repay the loan. Upgrade reports payments to all three major credit bureaus, so on-time payments will help build your credit score, but missed payments will hurt it.
Upgrade vs. Upstart
Upstart provides an instant personal loan application decision and can fund a loan within one business day. Upstart offers similar rates to Upgrade, but may more easily approve borrowers with low credit scores or thin credit histories using its alternative data underwriting model.
Upgrade may be the better debt consolidation lender because Upstart doesn’t offer direct payment to creditors or debt consolidation discounts.
Upgrade vs. Best Egg
Best Egg has slightly a slightly higher minimum credit score requirement and offers similar rates to Upgrade.
Best Egg provides a solid personal loan for large purchases and debt consolidation. Like Upgrade, Best Egg provides direct payment to creditors on debt consolidation loans, but doesn’t offer rate discounts or a mobile app.
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