Did you know that, on average, Americans have over $5,000 in credit card debt? Some of these cards have interest rates upwards of 15-20%. If you are looking for a way to pay your cards off sooner and get out of credit card debt, personal loan companies, such as Upstart, could be a viable way for you to get out of debt quickly while saving some dough.
With a personal loan, you will get a fixed interest rate, so your payment will be the same each month and you can use the money to pay off high-interest credit cards.
Upstart is a peer-to-peer (P2P) lender. What this means is that unlike a loan from a regular bank or credit union, P2P loans come from individuals and businesses. P2P lenders connect borrowers and lenders and use their simple platforms to review and approve applications.
The P2P process allows them to have lower interest rates than banks and credit unions, much lower interest rates than credit cards, and has a much quicker application and approval process.
What Makes Upstart Unique?
Upstart is unique because they focus on more than just your credit score. At one point, they only considered borrowers with a college degree, but will now consider people with or without a degree. While they do look at your credit score, it’s only one component of loan review process.
In addition to credit, they consider your educational achievements, credentials, and work experience. Even if you don’t have extensive credit or a college degree, it still possible to work with Upstart to get a personal loan.
Another unique aspect of Upstart is that they use the information they gain about you and compares it with other historical borrowers with similar characteristics to determine if you are a good applicant and what your interest rate is.
Is Upstart a Good Fit For You?
A personal loan from Upstart might be a suitable option for you if:
- Are a U.S. citizen (Upstart loans are available in all states except for West Virginia)
- Are at least 18 years of age (19 in Alabama and Nebraska)
- Have a name, date of birth, and social security number
- Have a regular source of income
- Have a bank account
- Have an email account
- Meet their minimum credit requirements (minimum of a 620 credit score, no bankruptcies on your credit report, and no loans or accounts that are delinquent, in collections, past due, or charged off)
The application process can be done entirely online. Fill out the form on the Upstart website and indicate how much you want to borrow, your education information, income source, and personal and financial information.
Based on that information, you’ll get a preliminary approval or denial. If you are approved, they’ll provide an estimated interest rate range, origination fee, and payments. If this is what you are looking for, you can continue the application process. If not, you can choose not to continue and there won’t be any negative impact on your credit score.
If you decide to continue, you’ll have to provide more detailed financial information, such as bank statements and income verification. A loan underwriter will then look through your documents and information and you might have to talk to a representative on the phone to verify some information.
Once you’ve done all of this, the underwriter will make you an actual loan offer with the exact interest rate, loan length and terms, and payment amount. Once you accept the loan offer, you can usually get your money direct deposited the next business day. The whole process, from application to receiving your funds, can typically be done in less than a week.
One important thing to know is that you can’t have any big changes to your credit once you’re offered the loan. Don’t make any purchases or have any large increases in your debt.
There are a lot of pros to Upstart loans and lots of great reviews of Upstart and their process, customer service, and ease of use. Some pros include:
- the application process is quick and simple
- the time between applying and receiving funds is short
- you can choose either a 3-year or 5-year loan term
- there are no prepayment penalties
- the underwriting process can be lenient
- customer service is helpful and responsive
- flexible repayment schedules; you can set up weekly or biweekly payments if that works best for your finances. The payments can be taken out of your bank account automatically
Although no company is perfect, Upstart does come very close. They have consistently positive reviews from customers and high ratings among personal lending gurus.
Overall, Upstart appears to be a great P2P lender. There are few negatives, but a few that have been identified include:
- the origination fee, which is taken right out of the principal amount of the loan
- rejections, despite meeting the minimum requirements for Upstart
Despite meeting the minimum requirements, there are still reasons why you may be denied an Upstart loan. These are covered in detail in their FAQ section.
The Verdict on Upstart Personal Loans
Upstart has many positive aspects. The quick and simple process, and their willingness to consider your education and work history while looking at your loan application could really help a lot of people out.
All of these factors make Upstart personal loans a great option for borrowers who want to pay off credit card debt or use the loan for educational purposes.
You can compare Upstart to other personal loan and P2P lenders on our site.