Upstart personal loans review: Accessible options for poor or no credit

A personal loan can be a valuable tool for financing various expenses — whether planned or unplanned. However, getting approved for a personal loan can be challenging if you don’t have a prior credit history or have less-than-stellar credit. 

In this situation, an Upstart personal loan can be a good choice. Its loans serve borrowers who need funding fast but whose credit might not meet the typical underwriting requirements of other lenders. 

Here’s what you should know if you’re considering a personal loan from Upstart.

Upstart overview

Upstart is an online lending marketplace that partners with banks to fund small business loans, car loan refinancing and personal loans. It launched in 2012 and has since gone public on the NASDAQ index.

It uses artificial intelligence and machine learning to connect consumers with a partnered bank that offers an ideal loan solution. Upstart’s personal loans range from $1,000 to $50,000 and come with repayment terms of three or five years. 

As of Dec. 1, 2023, Upstart has received an A+ Better Business Bureau (BBB) accreditation rating. Its customers generally have a positive experience as reflected in a 4.9 out of 5.0 star rating on Trustpilot. 

How to qualify for an Upstart personal loan

Upstart is known for its flexible eligibility requirements, particularly when it comes to its credit criteria. It has a minimum credit score requirement of 300 for applicants who have sufficient borrowing history to generate a credit report. However, it also accepts personal loan applications from individuals who don’t have a credit score.

Aside from credit-related factors, first-time Upstart loan borrowers must meet the following parameters to apply:

• Be 18 years old or older.
• Live in the U.S. with a valid residential address.
• Have a regular income or have accepted a job offer that starts within six months.
• Have a U.S.-based personal bank account and routing number.
• Have a valid email address.
• Have verifiable personal information.

Note that if your credit score drops more than 25 points after a loan from Upstart is approved but before it’s originated, you could be disqualified from receiving the funds. 

Your loan approval can also be rescinded before it’s funded if your debt obligations increase beyond Upstart’s allowable limit, if you become delinquent on any account or if certain new inquiries and accounts are found on your credit report.

How to apply for an Upstart personal loan

Applying for an Upstart personal loan is simple through its website. If you’re ready to get started, follow these steps:

1. Check your credit. When you apply for a personal loan, the lender will review your credit to determine your creditworthiness. So before you apply, it’s wise to check your credit reports and credit score to see where you stand. You can use a site like AnnualCreditReport.com to review your credit reports for free. To obtain your credit score, use an online credit-monitoring service; your score might also be available through your bank or credit card company.
2. Compare lenders. It’s important to shop around and compare your options not only from Upstart but also as many other personal loan lenders as possible. This can help you find a loan best suited to your needs. Some important factors to consider include interest rates, loan amounts, repayment terms and eligibility requirements. Like with many other lenders, you can get preapproved through Upstart with only a soft credit check that won’t hurt your credit score.
3. Pick a loan option and apply. After you’ve compared lenders, choose the loan option you like best. If you were preapproved by Upstart and decide to move forward, follow the online prompts to submit a formal personal loan application. You’ll also need to submit required documentation, such as tax returns or pay stubs.
4. Get your funds. If you’re approved, Upstart will have you sign for the loan so the funds can be disbursed. Upstart generally funds its loans as soon as one business day after approval.

Pros of an Upstart personal loan

• Flexible credit requirements: Most personal loan lenders require good credit. Upstart, however, works with borrowers who have bad credit or don’t have enough of a credit history to generate a credit score — this is usually referred to as having thin credit.
• Quick funding: If you’re approved, you could get your funds from Upstart as soon as the next business day after approval. This can make it a good option if you need fast access to cash.
• Broad loan purposes: You can use a personal loan from Upstart for almost any purpose, such as consolidating debt, making home improvements or covering medical bills.
• Low loan minimum: While some lenders have loan minimums of $5,000, you can borrow as little as $1,000 with Upstart. This could make it ideal if you only need a small personal loan.

Cons of an Upstart personal loan

• Charges multiple fees: Upstart personal loans come with an origination fee as well as fees for late and returned payments — all of which can increase your overall borrowing costs.
• High maximum APR: While Upstart’s minimum annual percentage rate (APR) is competitive, its maximum APR is higher compared to some lenders. Considering that you generally need good to excellent credit to qualify for the best rates on personal loans, borrowers with poor credit who borrow from Upstart can likely expect to receive a high interest rate.
• Doesn’t permit joint applicants or co-signers: Upstart only permits individual applications.
• Limited repayment term options: Upstart offers only three- and five-year terms on its personal loans.

Upstart perks and special features

Taking out a personal loan from Upstart has a few benefits that could make this lending option appealing to some. Here’s how Upstart stands out:

Savings and discounts

The starting APR for an Upstart personal loan is competitive compared to offerings from other lenders. Additionally, there are no fees or penalties for getting ahead on your loan repayment. The sooner you pay off your Upstart personal loan, the more you’ll save on interest charges.

Flexible credit requirements

Upstart’s most distinctive feature is the data it uses to determine whether to approve or deny your personal loan application. Instead of your credit being a heavily weighted factor, it evaluates your education and area of study as well as your employment history. This flexibility with credit scores makes the barrier of entry for an Upstart personal loan more accessible.

Quick funding

If you’re approved for a personal loan, Upstart can typically transfer the funds to you by the next business day, if you sign and accept the loan agreement on a Monday through Friday, before 5 p.m. Eastern Time (ET).

Note that if you’re using the loan for education purposes, it can take an additional three business days, which is still a relatively speedy turnaround time. 

Broad loan purposes

You can use loan funds from Upstart for a variety of purposes, some of which are prohibited by other lenders. 

For example, many lenders don’t allow personal loans to be used for higher education expenses or to repay student loans. Upstart, however, generally lets its borrowers use its loans for these purposes, with the exception of those who live in California, Connecticut, Illinois, Washington, or Washington, D.C.

How Upstart could improve

Although Upstart might offer personal loan borrowers some perks, it misses the mark in a few areas. Here’s how it could do better:

Charge fewer fees  

Upstart’s personal loans can come with a one-time origination fee of 0% to 12% of your loan amount, which is automatically deducted from your loan disbursement. Considering that some lenders don’t charge an origination fee at all, Upstart’s origination fee means you might pay more for the privilege of borrowing a loan. 

It also charges a late fee — $15 or 5% of the past due amount, whichever is higher — if you don’t make a payment within 10 days after your due date as well as a $15 fee for returned payments. However, it does let you change your monthly payment due date if needed. 

Reduce its maximum APR

Upstart’s maximum APR is on the higher end, which can make its loans more expensive if you can’t qualify for a lower rate.

Permit joint applicants or co-signers

Applying with a joint applicant or co-signer can make it easier to get approved for a personal loan and could get you a lower rate than you’d get on your own.

Provide more loan and term options

Upstart offers unsecured personal loans to individual borrowers. However, if you prefer a secured loan to potentially qualify for a lower APR, you won’t find that option at Upstart. 

Additionally, there are only two repayment terms offered by the lender — either a three- or five-year term. By comparison, several other lenders offer a wider range of terms so you can choose one that works best for your repayment goals.

Upstart customer service and reviews

You can reach Upstart’s general customer support by calling (650) 204-1000 or toll-free at (855) 438-8778. You can also email your questions to support@upstart.com. Support agents are available every day from 6:00 a.m. to 5:00 p.m. PT. 

Note that if you’re calling regarding your loan payment, operating hours are Monday through Friday from 6:00 a.m. to 6:00 p.m. PT and Saturday from 7:00 a.m. to 4:00 p.m. PT. 

Customer reviews on third-party sites vary. As of Dec. 1, 2023, Upstart has received a near-perfect score of 4.9 stars out of 5.0 on Trustpilot based on over 44,000 reviews. Reviewers generally applaud the lender’s fast funding approval and funding timelines as well as the ease of their borrowing experience.

However, reviews on the BBB are on the other end of the spectrum, earning Upstart 1.23 stars out of 5.0 with 230 reviews as of Dec. 1, 2023. The most common complaints were the high origination fees and dissatisfaction regarding application decisions.

Upstart alternatives: Upstart vs. SoFi vs. LendingClub

Before moving forward with an Upstart personal loan, it’s wise to compare multiple offers from other lenders. A couple of alternative lenders to consider include SoFi and LendingClub.

SoFi personal loans are available for amounts of $5,000 to $100,000, making it a good option for high-ticket expenses like home renovation. Like Upstart, it lets you check your rates before applying, and funds can be disbursed within the same day of signing. 

Its loans also come with no fees, and borrowers have access to multiple rate discounts and member benefits, such as unemployment protection. However, you’ll need a credit score of at least 680 (or a creditworthy co-borrower) to qualify with SoFi.

LendingClub’s personal loan maximum limit is slightly lower than Upstart at $40,000. This lender offers repayment terms of three to five years, and it charges origination fees as well as fees for late payments and insufficient funds.

However, LendingClub also has no specific minimum credit score requirement, and it allows joint applications, which can make it easier to get approved. 

^{All interest rates are current and include discounts as applicable as of Dec. 1, 2023.}

Frequently asked questions (FAQs)

Is it hard to get approved for a loan with Upstart?

Upstart’s unique underwriting model looks beyond an applicant’s credit score for loan approvals. For example, it evaluates your area of study and employment factors. Meeting the minimum eligibility requirements for an Upstart personal loan might therefore be easier compared to a traditional lender. 

Is Upstart a reputable company?

Yes, Upstart is an AI-driven lending marketplace that was founded in 2012. The fintech company went public on the NASDAQ in December 2020. As of the end of March 2023, it has originated $33 billion in loans and has 4.9 out of 5.0 stars on Trustpilot.

Can you pay off a loan through Upstart early?

Yes, Upstart lets its borrowers pay off their loans early without incurring a prepayment penalty. Early or extra payments can be made through the Upstart dashboard. If you opt to pay off your loan ahead of schedule, you can save money on interest charges associated with your loan.