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 interest 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.
How Do Upstart’s Student Loans Work?
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.
What Are Upstart’s Interest Rates?
Interest rates vary widely depending on income, education, and credit history. The APR rates range from 7.16% to 29.99%. There is also an origination fee of 2.8% to 8% to consider. Origination fees are deducted from the loan amount as a lump sum so remember to add them on to the loan amount requested, if you need a specific dollar amount.
On average, Upstart loans have APRs 30% lower than the average rates offered by Lending Club and Prosper. The average Upstart APR is 18%.
How Much Money Can I Borrow from Upstart?
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.
Which States Does Upstart Operate In?
Upstart is available in all 50 states.
What Is Upstart’s Application Process Like?
Upstart has a simple online application form that only takes a couple of minutes to complete. Potential borrowers can find out what their interest rate and terms would be without it affecting their credit. Once you are approved and have an interest rate, you can use a sliding bar to change the loan amount. The lower the amount, the lower the interest 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.
How Is Upstart Better than Other Lenders?
Upstart’s proprietary risk model allows it to provide fast loans to borrowers with limited credit and employment history at lower interest rates than most lenders. It does not charge pre-payment penalty fees and interest rates range from 7.16% to 29.99% APR. The average APR is 18%, which is low even when compared to leading loan marketplaces 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 interest rates.