Upstart personal loan review: Loans for limited credit or low scores

Christel Deskins

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An Upstart Personal Loan could be the right loan for people who have a strong work and education history, but not the best credit score or a limited credit history.

One of Upstart’s main distinctions is its underwriting process, which is the process of deciding who gets a loan and how much to charge in interest. Like any lender, Upstart considers credit scores as part of the process, but also considers employment history and education history such as where you went to school and your area of study.

While this could be an advantage for people with lots of college experience, it may work against borrowers without that experience.

An Upstart Personal Loan can have a variety of uses, including:

  • Refinancing credit card debt or student loans, or consolidating credit card debt
  • Education loans for courses, grad school, or college
  • Buying a car
  • Large purchases
  • Personal expenses including paying bills, moving expenses, home improvement, medical expenses, taxes, vacations, or weddings.
  • Business loans to start or grow a business 

While Upstart offers flexibility, you may find better interest rates through a loan intended for a specific use rather than a personal loan. If you’re buying a car, for example, you maybe be able to get a better interest rate with a car loan. Car loans use the car you’re buying as collateral to back the loan, or secure it. Secured loans generally have lower interest rates than unsecured loans, like personal loans. 

Borrowers looking to refinance student loans or borrow for education could find better interest rates elsewhere, too. Federal student loans are the best place to start for students wanting to borrow for undergraduate or grad school, with lower interest rates and no minimum credit requirements. 

However, if you’re looking to borrow money for any of the other reasons listed above, an Upstart Personal Loan might still be a good move. 

You might like a personal loan from Upstart if you: 

  • Have strong education and employment history (Upstart’s requirements for eligibility include a full-time or part-time job, proof of regular income, or a job offer starting within six months)
  • Meet the minimum credit score requirement of 620
  • Need a small loan (loans start at $1,000)
  • Want to work with an online lender, as Upstart doesn’t have any physical locations

A personal loan with Upstart might not be right if you: 

  • Live in West Virginia or Iowa, where loans are not available
  • Don’t have proof of regular income, which is a requirement
  • Don’t have a Social Security number and a US bank account
  • Want in-person support, as Upstart doesn’t have any branches

Approval isn’t dependent solely on credit scores

For people who have struggled with credit in the past, Upstart will factor in a few other pieces of information for a better shot at approval.

Low credit score requirements

While Upstart does consider factors other than credit scores, it also has a low minimum credit score requirement at 620.  

Low minimum interest rate

Personal loans from Upstart range from 4.66% – 35.99% APR. The minimum starting APR will only go to those with the best credit scores, but interest rates start lower than with competing lenders like OneMain Financial (from 18.00% – 35.99%APR) and Avant (From 9.95% – 35.99% APR). 

Small loans are available 

Upstart offers small loans, with a minimum loan amount of $1,000. Many competing lenders start their minimum loan amount higher. However, borrowers in four states are subject to higher minimum loan amounts: 

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

Only 3 and 5-year terms to repay

While other lenders offer several options on how long you’ll have to repay, Upstart only offers three and five-year terms, whether you’re borrowing $1,000 or $50,000. This choice could be impractical for borrowers on either extreme of the borrowing scale. However, there is no prepayment penalty, so you can pay your loan off at any time without a fee. 

Potential for high origination fees 

Upstart’s personal loans can have origination fees up to 8%. Compared to competing lenders, this is a very high maximum — similar lenders Avant and LendingClub top fees at 4.75% and 6%, respectively. 

Potential for high interest rates

Upstart personal loans can have interest rates between 4.66% – 35.99% APR. People with lower credit scores tend to incur higher interest rates on personal loans, and could end up with this interest rate. Comparing personal loan offers from multiple lenders could help you make sure that you’re not missing out on a better rate elsewhere.

  Upstart Avant LendingClub OneMain Financial
Min. credit score 620 580 600 None
Interest rate range 4.66% – 35.99% APR From 9.95% – 35.99% APR 10.68% – 35.89% APR 18.00% – 35.99%APR
Origination fee 0%-8% Up to 4.75% 2%-6% Fee type depends on state. Flat fees: $25- $400; percentage-based fees: 1%-10% of loan’s value.
Loan terms Three and five year terms only 24 to 60 months Terms start at 36 months 24, 36, 48, or 60 months
Loan amounts $1,000 – $50,000 $2,000 – $35,000 Up to $40,000 $1,500 – $20,000
When are funds available? Next business day Next business day As soon as 4 business days Same-day available

Upstart vs. Avant personal loans

Both Avant and Upstart allow borrowers with poor credit to get approved. For borrowers who meet Upstart’s minimum credit score requirement of 620, this lender could have an advantage with a wider range of interest rates and higher loan amounts. 

Upstart offers loans of up to $50,000, while Avant’s loans top out at $35,000. Interest rates start lower at Upstart, ranging from 4.66% – 35.99%APR, as opposed to Avant’s interest rates ranging From 9.95% – 35.99% APR. However, Avant’s maximum origination fee is lower than Upstart’s, topping out at 4.75% as opposed to Upstart’s maximum of 8%. 

Upstart vs. LendingClub personal loans

Both lending platforms have similar credit score requirements, and their own ups and downs. While Upstart has lower starting interest rates, LendingClub has lower origination fees. Checking your rates on both sites could be a helpful indicator of which has the best rates for you — both have a pre-approval option. 

Upstart vs. OneMain Financial personal loans

If you qualify for an Upstart Personal Loan, there are several benefits to this lender compared to OneMain Financial. At Upstart, interest rates start much lower than at OneMain, and origination fees are capped lower at 8% with Upstart. Upstart also offers larger loan amounts than OneMain. 

However, borrowers wanting secured loans could find that OneMain has an advantage — Upstart doesn’t offer a secured loan option. Additionally, OneMain Financial doesn’t have a minimum credit score required to apply.

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