Upstart is an online lending marketplace that specializes in offering loans to recent college grads with fair to excellent credit. Instead of focusing exclusively on credit scores, credit history, and income, Upstart looks at the education and job history of loan applicants when assessing eligibility.
Upstart has developed its own algorithm to calculate the likelihood a borrower will default on a loan. The algorithm includes factors other lenders don't look at so closely, such as area of study and their grades on standardized tests.
The company provides young adults with promising futures but without a lengthy credit history the chance to pay off their debt at lower rates. Even borrowers with less than 10 years of credit history can qualify for low rates, particularly when they have a college-level education. Having a job is not a requirement for borrowers who are attending an Upstart partner bootcamp.
- Rates range from 6% APR to 29.99% APR depending on how you score with Upstart's creditworthiness algorithm.
- Borrowers can choose loan terms of three or five years depending on eligibility.
Loan amounts range from $1,000 to $50,000.
Upstart operates in all states except West Virginia.
It only takes a few minutes to complete the online application and Upstart performs a soft pull on your credit so that applying won't affect your credit score. As well as the usual credit related questions, the application questionnaire looks into your level of education, what you majored in, your salary and your field of work. After a couple of minutes, you will receive a preliminary rate based on the information you provided. Final approval is contingent on verification of the submitted information.
The minimum FICO score to qualify for a loan is 620 and Upstart requires borrowers to have a source of regular income.
Upstart allows college graduates with limited credit history to qualify for competitive rates by using a new data-driven method of identifying creditworthy clients. This creates a more comprehensive view of borrowers' likelihood to default. It also gives a chance to recent graduates loaded down with debt or who need start-up cash to get their careers going. The application process is simple; there is no prepayment penalty, and rates are fixed.