Upstart is an online loan marketplace that focuses on prime borrowers with good to excellent credit, higher education and promising careers. This allows it to provide lower rates and more favorable terms than most lenders. Although Upstart provides loans for a variety of purposes, student loans are one of the main reasons its target audience need a loan.
Upstart was founded in 2012 by ex-Googlers, Dave Girouard, Paul Gu and Anna Counselman. It has an A- rating with the BBB and is based in Palo Alto, California.
Instead of just focusing on credit rating Upstart uses a proprietary underwriting model that looks for high quality borrowers despite limited credit and employment experience by considering a wide variety of factors when determining eligibility. These factors include job history, level of education and area of study.
Rates vary widely depending on income, education, and credit history. Whether you want funds to refinance your existing student loans or need money to pay for college-related expenses, Upstart loans are fixed loans with a rate that ranges from 8.69% APR to 29.99% APR. The average Upstart loan has a rate of 15% APR.
Inclusive in the APR is an origination fee ranging from of 2.8% to 8%. Origination fees are deducted from the loan amount as a lump sum so remember to add them to the loan amount requested if you need a specific dollar amount.
On average, Upstart loans have APRs that are 26% lower than credit card rates.
Upstart provides loans from $1,000 to $50,000 to pay off student loans. In Ohio, the minimum loan is $6,000, and in Massachusetts the minimum is $7,000. Loans can have a 3-year or 5-year term but there are no pre-payment penalties.
Upstart is available in all 50 states.
Upstart has a simple online application form that only takes a couple of minutes to complete. Potential borrowers can find out what their rate and terms would be without it affecting their credit. Once you are approved and have a rate, you can use a sliding bar to change the loan amount. The lower the amount, the lower the rates. If the rate and terms are acceptable you will need to provide documentation to confirm the information you provided. Once that is provided you can have the money in your bank account by the next day.
Upstart’s proprietary risk model allows it to provide fast loans to borrowers with limited credit and employment history at lower rates than most lenders. It does not charge pre-payment penalty fees and rates are competitive. The average rate is 15% APR, which is low even when compared to marketplace lenders like Prosper and Lending Club. If you have the necessary documentation and meet Upstart’s eligibility criteria, you can have your money in the bank within 24 hours. Not bad for a lender with such low rates.
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