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Upstart is a digital platform that connects banks and investors with borrowers who are looking for personal loans. The company uses an artificial intelligence (AI) underwriting model to evaluate applications, and helps service outstanding loans for its partner lenders. As a borrower, you may deal directly with Upstart from the application through the repayment process, and here's what you'll want to know.
| Pros | Cons |
|---|---|
| Doesn't require good, or any, credit | Potentially high origination fees |
| Fast loan processing and funding | Not available to residents of West Virginia or Iowa |
| Funds can be used for educational expenses in most states | Doesn't allow cosigners |
| Upstart Customer Service 855-438-8778 P.O. Box 1503 San Carlos, CA 94070 support@upstart.com |
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Upstart, a lending platform, distinguishes itself from other personal loan lenders and peer-to-peer lending platforms with its AI-powered underwriting model. The model helps Upstart's partner banks offer loans to a wider range of applicants with potentially more favorable terms than they could receive elsewhere. It can also decrease the application review and processing time to help you get your loan faster.
Potentially Better Rates Than You Could Get Elsewhere
Although other lenders may offer lower interest rates and fees to the most creditworthy applicants, Upstart's AI-powered model can lead to more approvals and lower interest rates for some applicants. You don't even need to be scoreable to qualify for a loan. And, if you have a credit score, the minimum credit score requirement is 300—the lowest score you can have.
The model considers over 1,500 variables, including things like credit history and employment, that many lenders will take into account. But it may also consider your educational history, bank account transactions and other variables that could lead to some applicants getting more favorable loan offers.
As a result, Upstart could be a great option if you have fair to good credit and likely won't qualify for the lowest-advertised interest rate from other lenders.
Watch Out for High Fees, Limited Terms and No Cosigners
You can check your loan offers without impacting your credit score, and hopefully receive a low interest rate offer. However, also look out for the origination fee—as high as 10%—which will be taken out of your loan's proceeds. Some applicants may qualify for a lower, or even 0%, origination fee. But unfortunately, Upstart doesn't allow you to add a cosigner to your application.
The potentially high fee means you could wind up borrowing (and repaying) up to 10% more money than you need, which can also lead to paying more interest over time. You can also only choose between two repayment terms: three or five years. Some other lenders offer a wider range of repayment terms, which can be helpful if you want to repay the loan more quickly to save on interest or would prefer a longer repayment period and smaller monthly payments.
Benefit From Fast Loan Processing and Funding
Many personal loan lenders advertise that you can receive your funds within one to two business days, and sometimes the same business day. Similarly, Upstart says 99% of its personal loan funds are sent within one business day, or up to three business days if you're using the money for educational purposes.
But those timelines start after you complete the application process and sign your loan document.
Although you may need to upload documents to verify your identity, income and education when you apply, Upstart also uses AI-models to improve the process. This could result in a fast and easy application process.
How to Qualify for an Upstart Personal Loan
Although Upstart's unique underwriting may improve your chances of getting a loan, make sure you meet the borrower and credit eligibility requirements.
Minimum borrower requirements:
- Live at a U.S. residential address, unless you're an active-duty service member
- Be at least 18 years old and have a Social Security number
- Not be a resident of Iowa or West Virginia
- Have a valid email account and personal U.S. bank account
- Earn at least $12,000 in annual income
If you are a current or previous Upstart borrower, you may qualify for a second loan if you've made at least six consecutive payments on time, aren't currently past due and don't have more than $50,000 in outstanding debt from Upstart.
In addition to the borrower requirements, you need to meet some credit requirements, including:
- Have a minimum 300 credit score (if you're scoreable)
- No bankruptcies on your credit report
- No currently past-due accounts on your credit report
- No more than six hard inquiries on your credit report (inquiries from student, auto and mortgage loans don't count)
- Have a debt-to-income ratio, excluding mortgage or rent payments, that's below 50%, or 45% if you live in Connecticut, Maryland, New York or Vermont.
Even if you get preapproved for a loan offer, Upstart will check your credit before sending your loan and may revoke the offer if your credit score significantly drops or you no longer meet the requirements.
Upstart Personal Loan Fees
Before you accept a loan from Upstart, review the terms carefully to see which fees apply:
- Origination fee: There is a 0% to 10% origination fee that's deducted from the amount you receive. The fee may depend on your creditworthiness and the lender that funds your loan.
- Late payment fee: The fee is 5% or $15, whichever is higher, but Upstart also gives you a 15-day grace period.
- ACH returned or check refund fee: A $15 fee per occurrence. Make sure you make the payment within the 15-day grace period to avoid an additional late payment fee.
- Paper copies: You can request paper copies of your records, but you may have to pay up to $10.
Upstart does not charge a prepayment fee, and you can save money by paying off your loan early. However, you won't receive any of your origination fee back.
How to Apply for an Upstart Personal Loan
The Upstart loan application and funding process takes place entirely online, and you may be able to check your offers within five minutes. Here's what you can expect:
- Check your rates. Fill out the forms and indicate how much you want to borrow, how you plan to use the loan and your name, date of birth, address, email, telephone number, education, employment and savings. You'll then be prompted to create an account.
- Compare loan offers. If you qualify, you can compare the loan offers' repayment terms, interest rates and monthly payments.
- Complete the application. After selecting your desired offer, complete the application by verifying your bank account. Some applications also need to upload documents to verify information, such as their identity, income or education.
- Sign the agreement. Once the application is reviewed and approved, you'll have to sign the final disclosures and promissory note.
The loan proceeds, minus the origination fee, will be sent to your bank account once you sign the final forms.
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Compare Offers to Find the Best Loan
If you have average credit, or no credit at all, it's worth going through the quick rate-check process with Upstart to see if you can get a loan. However, you also want to get loan offers from multiple lenders and platforms to see which one will give you the most favorable terms. You can do this easily with Experian CreditMatch™, which lets you quickly compare loan offers from multiple providers based on your unique credit profile.