Upgrade Personal Loans: 2021 Review

Upgrade’s personal loan stands out for its many consumer-friendly features and unique underwriting principles.

Annie MillerberndNovember 12, 2020
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Our Take

5.0

NerdWallet rating 

The bottom line: Customizable loan features and discount opportunities make Upgrade a solid loan for fair- and bad-credit borrowers with strong monthly cash flow.

Upgrade

on Upgrade's website

on Upgrade's website

Min. Credit Score

580

Est. APR

7.99 - 35.97%

Loan Amount

$1,000 - $50,000

Pros & Cons

Pros

  • Allows secured, co-signed and joint loans.

  • Offers rate discount with direct payment to creditors on debt consolidation loans.

  • Rate discount for autopay.

Cons

  • Charges origination fee.

  • Charges late fee.

Compare to Other Lenders

Upgrade
Prosper
Upstart
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Est. APR

7.99 - 35.97%

Est. APR

7.95 - 35.99%

Est. APR

6.16 - 35.99%

Loan Term

3 to 5 years

Loan Term

3 to 5 years

Loan Term

3 to 5 years

Loan Amount

$1,000 - $50,000

Loan Amount

$2,000 - $40,000

Loan Amount

$1,000 - $50,000

Min. Credit Score

580

Min. Credit Score

640

Min. Credit Score

580

Compare estimated rates from multiple lenders

Compare Rates

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Full Review

Upgrade personal loans are designed for mainstream appeal, supporting a wide range of credit scores and incomes.

The loans have comparable rates and fees to other online lenders targeting similar audiences, but Upgrade differentiates itself with features like rate discounts for having payments sent directly to creditors on debt consolidation loans. Upgrade is also one of few lenders to offer joint, secured and co-signed personal loans.

The lender emphasizes free cash flow when reviewing a loan application. While debt-to-income ratio and credit score are important, a spokesperson says, they don’t account for rent payments and other monthly expenses that can factor into your ability to repay a loan.

The idea is to keep people from borrowing more than they can afford by “having a pretty high bar in terms of how much free cash you really have at the end of the month,” says Renaud Laplanche, Upgrade co-founder and CEO.

Upgrade is best for borrowers who:

  • Have fair or bad credit (689 or lower FICO).

  • Want to secure the loan or add a co-borrower to their application.

  • Are consolidating other unsecured debts.

Upgrade at a glance

Credit building

  • Soft credit check to pre-qualify.

  • Reports payments to three credit bureaus.

Affordability

  • Offers rate discount for autopayments.

  • APRs are comparable to similar lenders.

  • Charges 2.9% - 8% origination fee.

  • No prepayment fee.

Loan flexibility

  • Allows co-signed, secured and joint loans.

  • Can fund a loan within one day.

  • Offers only three- or five-year repayment terms.

  • Loans not available in Iowa, West Virginia and Washington, D.C.

Transparency

  • Website includes comprehensive FAQ and financial education.

  • Rates and fees are disclosed in the footer of the lender's homepage.

Customer experience

  • Customer service representatives available every day.

  • Fully online application and approval process.

  • Offers mobile app to manage loan.

Where Upgrade stands out

Discount for direct payments on debt consolidation loans: Upgrade offers a 1% to 3% rate discount for borrowers who get a debt consolidation loan and have the lender directly pay their other debts. The discount varies based on the applicant, a spokeswoman says.

Autopay discount: Setting up automatic loan payments from a bank account can get you a 0.5% rate discount, which is a larger discount than some other online lenders offer.

Pre-qualify with soft credit pull: Upgrade lets you check your rate and offers with a soft credit pull, which does not impact your credit score. If you accept the offer, a hard pull is triggered. Upgrade uses the FICO 9 credit score to evaluate borrowers.

Joint, co-signed and secured loans: Upgrade allows applicants to add a co-signer to improve their chances of qualifying for a loan. You can also get a joint loan with another borrower if you both need access to the funds.

Applicants can use a vehicle as collateral on a secured loan. The lender will consider the value of the vehicle on your application, which could lead to a lower rate. Keep in mind that if you secure a personal loan and fail to repay it, the lender can seize the collateral.

Hardship program: Consumers who experience a sudden hardship, like a job loss, may qualify for a temporary reduction of their monthly payment or a permanent loan modification that extends the length of the loan.

This option can be helpful in a pinch, but extending your loan’s repayment term without getting a reduced rate can cost more interest overall.

Where Upgrade falls short

Limited repayment terms: Borrowers can choose between three- or five-year repayment terms on an Upgrade loan. These terms are somewhat common among online lenders, but it doesn’t leave room to choose a longer repayment term for lower monthly payments or a shorter one to save on interest.

Origination fee: Upgrade charges an origination fee, which isn’t uncommon among online lenders. At 2.9% to 8%, Upgrade’s origination fee is high compared with other lenders, though. Your origination fee is calculated in your annual percentage rate.

How to qualify for an Upgrade loan

  • Minimum credit score: 580.

  • Minimum annual income: None; average borrower income is $87,000.

  • Minimum credit history: Three years.

  • Minimum number of accounts on credit history: Two accounts.

  • Minimum monthly free cash flow: $800.

  • Maximum debt-to-income ratio: Varies between 55% and 65% including the loan you’re applying for and mortgage payments. To see your post-loan DTI, calculate your monthly payments on a personal loan, and then add them to your debt-to-income calculation.

  • Average loan amount: $10,000.

  • Average repayment term: 40 months.

Loan example: A three-year, $10,000 loan with a 21.8% APR would cost $381 in monthly payments. You’d pay $3,716 in total interest on that loan.

How to get an Upgrade loan

Pre-qualify on NerdWallet

NerdWallet recommends comparing loans to find the best rate for you. Pre-qualifying may get you personalized rates from multiple lenders that partner with us, including Upgrade. Pre-qualifying will not impact your credit.

Apply on Upgrade

You can apply on Upgrade’s website by entering a loan amount and purpose on the lender’s personal loans page. You’ll be asked for further information to pre-qualify first. If you’re shown any offers, you can accept one to continue the loan application process.

on Upgrade's website

Personal Loans Rating Methodology

NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including: soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus, and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews. Read our editorial guidelines.