Upstart is an online lender, founded by ex-members of Google's enterprise team. Upstart prides itself on its intuitive loan approval process. Unlike banks, they don't simply look at your credit score. They look at a range of factors that can affect your ability to responsibly handle a loan like your level of education, the school you attended, your areas of study, job history as well as your credit history.
Upstart structures loans around your need for them. You are able to choose the reason you want the loan whether it is to pay off credit cards, pay off student loans, pay for college or class, start or expand a business and many more options. This, along with their approval criteria, means you have a loan personalized to you. Upstart claims to offer rates that are 30% lower than other lenders.
Upstarts loans have to be paid off within 3 years. This maximum term is shorter than many other lenders, which is a double edged sword. A shorter term means higher monthly payments but less money paid in interest overall.
Upstart is a young company, starting in April 2012, but it already has a reputation for ease of use and good customer service. Pursuing online user review sites will general reveal that customers were surprised by how simple Upstarts process was.
Unfortunately, Upstart charges origination fees of 1 to 6% of the target amount, late fees of 5% of the late amount ($15 if that's more) and a $15 processing fee when you pay by checks. These are not uncommon in this industry, especially the late fee. You can avoid processing and origination fees with other lenders, but considering the level of service and generally low APR, these fees aren't deal breakers.
Intuitive Approval Process
Additional incentives that you should consider in using this company for a loan are, due to its peer-to-peer lending platform, Upstart has a very good business model and factors in data that we previously mentioned from areas traditional lenders may not consider, such as your college, GPA, work history and test scores. This can help if you're a student who's struggling to pay bills or if you've graduated and are now hit with heavy school loan repayments and want to consider a loan to consolidate your debt. According to the American Enterprise Institute, some are even finding that this may be a better alternative to traditional school loans.
A Trustworthy Lender
Reviews for Upstart personal loans have been coming in and sites like Credit Karma are indicating that the loan company is doing well. With an average score of 4.7 based on 779 noted reviews, Upstart is being met well with the online community looking for small loans. A few comments indicated that applicants were impressed with the low costs and thought there might be hidden fees, but were pleasantly surprised by the simple loan process.
Upstart is also making a lot of headway in terms of the amount of press it has received. Aside from its impressive crowd funding start-up fund that raised an impressive $5.9 million dollars, its Forbes coverage, articles in Wired and VentureBeat, Economist Bryan Caplan has made mention of it in his EconLog blog.
Upstart Personal Loan Purposes
Common uses for their loans include paying off credit cards, consolidating debts, paying off student loans, taking a course or boot camp, paying for college or grad school, making a large purchase, relocating, paying off medical bills, starting or expanding a business, buying a car or using the funds for something else.
It's worth noting that, due to rates being 30% lower than traditional loans, a lot of people are using to consolidate existing loans into a smaller bill. This is a great incentive for anyone who is looking for a way to cover credit card debt, especially given that interest rates on credit cards can be as high as 23-26%.
It's recommended that for anyone thinking about consolidating their loans in this manner or just interested in applying for a loan with Upstart to go to their site and apply in their easy 2-minute application. They will ask about employment and education and once you accept the terms, your money is ready the next day. You can then set up auto repayments and the good news is if you want to pay your loan off early, you can. There is no pre-payment fee.
A typical loan term based on borrowing $10,000 may come back with an APR of 8.29% and a monthly payment of $305. Upstart's site indicates that the average loan APR is 16% over 36-months. Loan amounts vary from as little as $3,000 to as much as $35,000. While they don't have an income requirement, Upstart does require a debt to income ratio that has to be lower than 50%.
As with any loan that is taken out, when you start an Upstart loan, be sure that you don't take out more than you can afford. With such easy terms, sometimes students and those who haven't paid back large amounts of money should factor in if they can meet their monthly obligations. If an applicant is currently having problems making payments with one credit card or loan company, switching to Upstart may not be the total answer but it can help.
Consider also tapping into free debt services that can help to find ways to reduce and eliminate excessive spending and help to lower other monthly costs. Additionally, for those who are about to declare bankruptcy, or for anyone with high debts, having a loan with easy terms can help as it can save applicants from collections and high interest rates to give them a chance to get caught up on their debts. Just be careful in taking out high loans for a new car or that dream cruise. Applicants should always be responsible with their money and look for ways to work on and increase their savings goals.
Considering Upstart is still a relatively new company as it's only been in existence since 2012, they are quickly gaining momentum. With positive reviews, easy to use features, and easy terms and approval, Upstart may be a new trend that can help make debt consolidation and bill payments easier.
Upstart is a new service but it is already made a name for itself in the industry. The intuitive approval process, the good customer service and competitive rates make this company a solid choice.