Upstart Personal Loans: 2021 Review

Upstart underwrites personal loans using alternative data and artificial intelligence to give bad- and fair-credit borrowers a better chance at qualifying and getting a low rate.
Annie MillerberndAug 26, 2021

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Our Take

4.5

NerdWallet rating 

The bottom line: Though Upstart’s personal loans don’t come with dazzling features, they’re a fast-funding option for borrowers with low credit scores and strong earning potential.

Upstart

on Upstart's website

on Upstart's website

Min. Credit Score

None

Est. APR

5.38-35.99%

Loan Amount

$1,000-$50,000

Pros & Cons

Pros

  • Accepts borrowers new to credit.
  • Able to fund loans one business day after the borrower accepts a loan offer.
  • Offers direct payment to creditors with credit card consolidation loans.
  • Allows borrowers to choose and change payment date.

Cons

  • May charge an origination fee.
  • Borrowers can choose from two repayment term options only.
  • No mobile app to manage a loan.

Compare to Other Lenders

Upstart
Upgrade
BestEgg
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Est. APR

5.38-35.99%

Est. APR

5.94-35.47%

Est. APR

5.99-29.99%

Loan Term

3 to 5 years

Loan Term

2 to 7 years

Loan Term

3 to 5 years

Loan Amount

$1,000-$50,000

Loan Amount

$1,000-$50,000

Loan Amount

$2,000-$50,000

Min. Credit Score

None

Min. Credit Score

560

Min. Credit Score

640

Compare estimated rates from multiple lenders

Compare Rates

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Full Review

Upstart differentiates itself from other online lenders with its underwriting model. The company uses artificial intelligence and nontraditional data — like college education, job history and residence — to qualify borrowers. More traditional lenders, like banks, focus almost exclusively on a borrower's credit report, debts, income and assets.

The company says its underwriting model helps younger applicants and those with thin credit histories qualify for a loan.

Upstart is best for borrowers who:

  • Want the ability to change their payment date.

  • Need funds fast.

  • Don’t need to manage their loan from a mobile app.

Upstart at a glance

Affordability

  • APRs are consistent among lenders targeting bad-credit borrowers.

  • Charges origination and late fees.

  • No rate discount for autopayments.

Loan flexibility

  • Offers direct payment to creditors with credit card consolidation loans.

  • Funds most loans in one business day.

  • Borrowers can use an Upstart loan to refinance a loan from another lender, but not an existing Upstart loan.

  • Loans available in all 50 states.

Transparency

  • Soft credit check to pre-qualify.

  • Reports payments to three credit bureaus.

  • Clearly discloses rates and terms on website.

  • Comprehensive FAQ answers common borrower questions.

Customer experience

  • Offers multiple customer contact channels.

  • Customer service is available seven days a week.

  • Doesn't offer a mobile app to manage a loan.

Key terms to know about personal loans

Annual percentage rate is the interest rate on your loan plus all fees, calculated on an annual basis and expressed as a percentage. Use the APR to compare loan costs from multiple lenders.

An origination fee is a one-time, upfront fee that some lenders charge for processing a loan. The fee can range from 1% to 10% of the loan amount, and lenders typically deduct it from your loan proceeds.

The debt-to-income ratio divides your total monthly debt payments by your gross monthly income, giving you a percentage. Lenders use DTI — along with credit history and other factors — to evaluate a borrower's financial ability to repay a loan.

Lenders that offer pre-qualification typically do so using a soft credit check, which allows you to see rates and terms you qualify for without affecting your credit score. If you accept the loan offer, the lender will perform a hard check to confirm your information. Hard checks knock a few points off your credit score.

Where Upstart stands out

Fast funding: Upstart says borrowers can pre-qualify to see their rate in five minutes and should expect approval to take one business day. The company says the majority of its loans are funded one business day after a borrower signs a loan agreement.

If you’re prompt about sending paperwork, you can expect the whole process to take about two business days.

Direct payment to creditors: For personal loans used to pay off credit cards, Upstart sends your loan proceeds to your credit card issuers to simplify the debt consolidation process.

Flexible payments: Borrowers can change their monthly payment date an unlimited number of times through Upstart's online portal. Changing your payment date doesn’t change the original due date, though, and the 15-day grace period for late fees applies to the original due date.

For example, if your loan is due on the 8th of the month and you move your payment date to the 10th, your payment won’t be late because it’s within the due date’s grace period. However, if you move your payment date to the 25th, it will be late and you may be charged a late fee.

Multiple ways to pay: The lender lets borrowers pay via mailed check, over the phone, online and with automatic payments.

Alternative data use: In 2019, the Consumer Financial Protection Bureau published a blog post crediting Upstart’s underwriting model with approving more applicants at lower rates than a traditional underwriting model. In a test, the bureau says, consumers with FICO scores between 620 to 660 were approved twice as often as with a traditional credit model, and applicants younger than 25 were 32% more likely to be approved.

Lenders that use data like college major and work history in borrower evaluations — as Upstart does — say it gives them better insight into a borrower's financial reality. But consumer advocates say it could reinforce existing racial and economic disparities.

Where Upstart falls short

Limited repayment terms: Borrowers can choose a three- or five-year repayment term. Those same terms are offered by a few other online lenders, but they’re inflexible compared with lenders with as many as five or six repayment term options. The more repayment terms you have to choose from, the more control you have over monthly payments and overall interest costs.

Origination fee: Some lenders that use Upstart’s online lending platform charge an origination fee, which isn’t uncommon with personal loans, but the fee cuts into your total loan amount. Upstart’s fee can range from 0% to 8% of the loan amount.

No mobile app to manage a loan: Some online lenders have mobile apps where borrowers can make loan payments, view their payment history and see their latest credit score. Upstart doesn’t offer these features.

No co-signed, joint or secured loan options: Adding a co-signer, co-borrower or securing a loan can help borrowers who may not otherwise qualify get a reasonable rate on a personal loan. Upstart offers unsecured loans only.

How to qualify for an Upstart loan

  • Minimum credit score: None.

  • Minimum credit history: None; borrowers with credit histories too limited to produce a FICO score may be accepted.

  • Minimum gross income: $12,000.

  • Employment: Full-time job, full-time job offer starting in six months, a regular part-time job or another source of regular income.

  • Must have a U.S. address where the borrower resides (unless military personnel on active duty).

  • Must be at least 18 years old.

  • Valid email account required.

  • Personal bank account with U.S. routing number required.

Loan example: A three-year, $12,000 loan with a 20.5% APR would cost $449 in monthly payments. A borrower would pay $4,164 in total interest on that loan.

How to get an Upstart 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 Upstart. Pre-qualifying will not impact your credit.

Apply on Upstart

You can check your rate on Upstart’s website. Enter the amount you want to borrow and answer questions about your credit score, level of education and other details to see an estimated rate for a loan.

on Upstart's website

Personal Loans Rating Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 30 lenders. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read our editorial guidelines.