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.
How Does It Work?
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 interest rates. Even borrowers with less than 10 years of credit history can qualify for low interest 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.
What Are The Interest Rates And Terms?
- Interest rates range from 4.93% to 29.99% APR depending on how you score with Upstart's creditworthiness algorithm.
- Borrowers can choose loan terms of three or five years.
How Much Money Can I Borrow?
Loan amounts range from $1,000 to $50,000. A $10,000 loan with a 5.7% APR will cost you $302.86 a month. A total of $902.96 in interest. The same loan with a 30% APR will cost you $424.52 or $5,282.72 in interest.
Which States Do They Operate In?
Upstart operates in all states except West Virginia.
What Is the Application Process Like?
It only takes a few minutes to complete the online application and Upstart performs a soft pull on your credit so 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 interest rate based on the information you provided.
However, your loan is not approved until individual investors choose to fund your loan application. Once approved, applicants receive their money within 24 hours. Because Upstart is a lending marketplace, it could take several days for investors to fund a loan application.
The minimum FICO score to qualify for a loan is 620. Upstart doesn't have a minimum income to qualify but does require that you have a source of regular income.
How Is It Better Than Other Lenders?
Upstart allows college graduates with limited credit history to qualify for competitive interest rates by using a new data-driven method of identifying creditworthy clients. This creates a fairer and 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 interest rates are fixed.
* This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Duplicate offers received as a result of multiple injuries by the same person are void. This offer may be accepted only by the person identified in this offer and legally able to enter into a contract for the extension of credit and a U.S. citizen or permanent resident and currently a resident in the US. You may be eligible for loan amounts from $1,000 to $50,000, subject to final loan approval. The minimum loan amount is $6,000 for borrowers in Ohio and $7,000 for borrowers in Massachusetts. APRs range from 5.67% - 29.99%. Not all applicants will qualify. Loan approval, APR and loan amount will be determined based on your credit, income and other information provided in the application. Closing your loan is contingent upon you meeting our eligibility requirements, our verification of your information and your agreement to all of the terms and conditions on the www.upstart.com website. If you accept your loan by 5 PM ET (except weekends and holidays) you will receive your funds the next business day. Education-related loans are subject to a mandatory 3 business day waiting period, following the applicant’s acceptance of the loan terms.