Upstart Personal Loan Review

A broad underwriting process could get you lower rates

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Upstart Personal Loans

Upstart is a lending platform that launched in 2012 and caters to borrowers who are new to credit or are rebuilding their scores. The platform’s underwriting model takes into account more than 1,500 data points including your academic background and job when deciding approvals. Upstart promises applicants a fairer and faster application process that approves loans at a higher clip with lower interest rates than traditional models. Upstart may be a good fit for you if your credit score is above 620, you need a relatively large infusion of cash, have a college degree and income of $80,000 or higher, or you don’t have a FICO credit score (other factors like education and job would likely become important).

  • APR Range 4.66% to 35.99%
  • Recommended Minimum Credit Score 620
  • Loan Amounts $1,000 to $50,000
  • Loan Terms 36 or 60 months
  • Pros & Cons 
  • Fees
Pros & Cons 
Pros
  • Loans are accessible to borrowers with short credit histories

  • Unique underwriting process helps some borrowers get lower rates 

  • Borrowers can customize their repayment schedules

  • Funds are usually transferred within one day

Cons
  • High APR is among the worst

  • Multiple fees

  • Joint applications aren’t allowed

  • Upstart’s use of nontraditional data doesn’t guarantee lower rates

Fees
  • Origination fee: 0% to 8% of loan amount 
  • Late payment fee: $15 or 5% of amount due (whichever is greater)
  • Returned payment fee: $15
  • Paper copy fee: $10

A February 2020 report from lending watchdog and advocate Student Borrower Protection Center suggests that some recent grads who attended minority-serving colleges may be assigned higher APRs than college graduates from non-minority-serving schools with similar applications. Upstart has denied this, noting that it regularly tests its model for bias and that its model generates higher approval rates at lower APRs for graduates of historically Black colleges and universities. 

Pros of Upstart Loans

  • Loans are accessible to borrowers with short credit histories: Not many lenders with competitive rates cater specifically to borrowers who are new to credit. According to internal research Upstart shared with the Consumer Financial Protection Bureau (CFPB), Upstart’s lending model leads to 27% more loan approvals than conventional underwriting models.
  • Unique underwriting process helps some borrowers get lower rates: According to the CFPB, Upstart’s internal research also shows that approved applicants are awarded significantly lower rates, on average. For example, borrowers received 15-17% lower APRs, on average, when Upstart’s underwriting model was used in place of conventional underwriting models.
  • Borrowers can customize their repayment schedules: Upstart allows borrowers to easily customize their loan payments and revise payment amounts and repayment schedules over time. For example, you can reset due dates online or tackle your loans more aggressively with quick, unscheduled payments. Also, you may be able to divide your monthly payment into multiple small payments. 
  • Funds are usually transferred within one day: Upstart claims that it funds 99% of its loans within a day after borrowers have signed their loan contracts.

Cons of Upstart Loans

  • High APR is among the worst: The highest APR available from lenders on Upstart’s platform matches the highest rates of other personal loan lenders. 
  • Multiple fees: Upstart charges significantly higher fees than many competitors, including a maximum origination fee that’s several points higher than the maximum fees other lenders and lending platforms charge. In addition, if you’re 10 days late paying, you may be hit with a fee of $15 or 5% of your past-due amount, whichever is greater. Lenders like Marcus and SoFi, on the other hand, don’t charge late fees or origination fees.
  • Joint applications aren’t allowed: Unlike some personal loan lenders, Upstart doesn’t allow you to use a co-signer to strengthen your application. So, your rates and loan amounts will be based solely on your own credentials.
  • Upstart’s use of nontraditional data doesn’t guarantee lower rates: Since Upstart factors your education and job into its loan decisions, you may not get lower rates if you don’t have a college degree or an impressive job. Like any lender, Upstart doesn’t detail exactly how it decides your loan amount, term, rate, or origination fee. Therefore, it’s important to shop around for multiple rates to get the best personal loan available.

Upstart Personal Loan Rates & Terms

Depending on your credit history, education, and career credentials, your APR will be anywhere from 4.66% to 35.99%. According to Upstart, the average APR for a three-year loan is 22%.

Upstart doesn’t offer the widest range of loan terms: You’ll get a choice between a three-year loan or a five-year loan. However, Upstart doesn’t charge a prepayment penalty, so you can pay off your loan early if you can afford it.

Upstart loans are funded by lending partners like Cross River Bank. The credit profile Upstart creates from nontraditional data increases your chances (in some cases) of getting a loan from its partners, and can influence the interest rate you get.

How Much Can You Borrow With Upstart?

You can borrow anywhere from $1,000 to $50,000, depending on your credit history, income, job, education, where you live, and other factors.

However, applicants in some states may have higher minimum loan amounts:

  • Massachusetts: $7,000
  • Ohio: $6,000 
  • New Mexico: $5,100 
  • Georgia: $3,100

Upstart allows you to use your personal loan funds “for any occasion,” including to pay for a wedding, home improvement project, finance a medical procedure, or pay off your credit cards.

Upstart does not offer loans in West Virginia or Iowa.

Upstart Personal Loan Fees

Like most online lenders, Upstart doesn’t charge a prepayment fee. However, it does charge several other fees, including: 

  • A 0% to 8% origination fee 
  • A late fee of $15 or 5% of the amount that’s overdue, (whichever is greater)
  • A $15 returned payment fee
  • A $10 fee for paper copies of your consent forms

Upstart’s maximum origination fee is especially notable since it’s several points higher than the maximum origination fees charged by many lenders.

How to Get a Personal Loan from Upstart

The application process is entirely online and, according to Upstart, can be completed within minutes. Click on “Check your rate” on Upstart’s personal loan page. In addition to being asked for the usual personal information and how you plan to use the loan, you’ll be asked: 

  • Where you went to school
  • What year you graduated 
  • What you majored in
  • The company you work for 
  • Your current job title
  • How much you earn in wages 

Upstart will perform a soft credit check (which doesn’t affect your credit score) and use its underwriting model to assess your creditworthiness. If you accept the rate you’re offered, Upstart will then pull your credit report again (this time leading to a hard inquiry on your credit report) and process your application. Upstart will also analyze your income, credit history, and other factors when setting your available loan amount.

If you accept Upstart’s loan offer by 5 p.m. Eastern on a weekday, your money may be deposited in your account as soon as the next business day. Loans for educational-related purposes will take an extra three business days to process.

Final Verdict

Upstart offers applicants a unique opportunity to use personal data, such as education and job history, to bolster their applications and secure competitive loans that they may not otherwise have been able to get.

Depending on your credit history and personal background, you may be able to secure a lower APR than you’d get from another lender or get approved for a loan that other lenders refused to fund. However, don’t accept a loan offer through Upstart until you’ve compared it to offers that you’ve received from other lenders. Some loans you get through Upstart could have exceptionally high APRs and fees, so you’ll want to make sure you’re getting the best deal possible for you.

 

Article Sources

The Balance requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy .
  1. CFPB. "An Update on Credit Access and the Bureau’s First No-Action Letter." Accessed July 14, 2020.

  2. Upstart. "Online Loans." Accessed July 14, 2020.

  3. Upstart. "What Fees am I Charged?" Accessed July 14, 2020.