Upstart in a nutshell
Upstart offers personal loans even for people with insufficient credit history. They are one of the biggest names in personal loans. Here is what we can say about their target.
|$1,000 – $50,000
|4.6% – 35.99%
|Min. Credit Score:
|1 – 7 Days
|3 – 5 Years
|Average Borrower Profile:
|Low credit scores, high DTI ratios
Terms: Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).
Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.
The full range of available rates varies by state. A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.44% and a 8.64% origination fee of $864, for an APR of 22.88%. In this example, the borrower will receive $9136 and will make 60 monthly payments of $257. APR is calculated based on 5-year rates offered in March 2023. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.
While most loans through Upstart are unsecured, certain lenders may place a lien on other accounts you hold with the same institution. It is important to review your promissory note for these details before accepting your loan.
When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information may be reported to the credit bureaus.
The APR calculation compares the two models based on the average APR offered to borrowers up to the same approval rate. The hypothetical credit-score only model used in Upstart’s analysis was developed in connection with the CFPB No Action Letter access-to-credit testing program and was built from a traditional credit score only model trained on Upstart platform data. APR for the scorecard was averaged for each given traditional credit score grouping.
While automated recurring payments are easy to set up, payments by check or one time electronic payments can also be used to repay a loan. Borrowers have the flexibility to choose the repayment method that works best for them.
This information is based on actual borrowers as of 4/1/2023 who identified “credit card refinancing” as their primary use of funds and paid off at least 51% of their outstanding credit card debt within 3 months of taking out the loan. Out of these actual borrowers, some could have experienced an increase or decrease in their credit score. This information reflects the overall average change in credit score points experienced by this group of borrowers as identified above.
The majority of borrowers on the Upstart marketplace are able to receive an instant decision upon submitting a completed application, without providing additional supporting documents, however final approval is conditioned upon passing the hard credit inquiry. Loan processing may be subject to longer wait times if additional documentation is required for review.
If you are a young millennial, you’ve probably been denied loans several times due to your insufficient credit history. Most lenders rely on FICO scores to determine credit eligibility, and since most young millennials lack enough credit history, they are locked out.
For the record, the FICO score considers the borrower’s payment history, length of credit history, types of credit used, the current level of indebtedness, and new credit accounts.
Upstart Loans addresses this challenge by considering other metrics that favor young millennials entering the job market. These include education, the area of study, ACT scores, GPAs, employment, and income.
In a snap