Upstart Debt Consolidation Loan – 2021 Review

Upstart offers debt consolidation loans from $1000-50,000 for 3-5 year terms. Their interest rate (which depends on your credit score and income) is 5.31% – 35.99%. Which is fixed once they send you an offer. Upstart also funds within 1 business day after accepting your loan.

Loan Amounts & Terms

Loan amounts. Upstart offers fixed-rate personal loans between $1,000 and $50,000. However, there are state-specific minimums in Massachusetts ($7,000), Ohio ($6,000), New Mexico ($5,100) and Georgia ($3,100).

Loan terms. Borrowers have access to personal loan terms of three or five years—36 or 60 months.

Loan Costs

  • APR. Rates range from 5.31% to 35.99%. Upstart does not offer autopay discounts like other providers. *All rates accurate as of Oct. 27, 2021.
  • Origination fees. Upstart charges 0% to 8%. This is a one-time fee that’s deducted from the loan proceeds before they are delivered to the borrower.
  • Late fees. If a borrower fails to pay the full monthly payment amount within 10 calendar days of its due date, Upstart charges a late fee equal to 5% of the past due amount or $15, whichever is greater.
  • Prepayment penalty fees. Upstart does not charge prepayment penalties for borrowers who wish to pay off their loan early.
  • Unsuccessful payment fee. There is a $15 charge per occurrence when bank transfers (ACH) or checks are returned or fail due to insufficient funds—or for any other reason.
  • Paper copy fees. Upstart charges borrowers a one-time fee of $10 if they request physical copies of records and withdraw eSign consent.

Perks & Features

    Hardship program. Borrowers can apply to temporarily suspend loan payments if they experience economic hardship, like job loss. Keep in mind, however, that interest continues to accrue during this period.

Pros & Cons

Pros

  • Accepts first-time borrowers.
  • After a borrower accepts a loan offer, the lender is able to fund the loan the next business day.
  • With credit card consolidation loans, it offers direct payment to creditors.
  • Borrowers can choose and adjust their payment date.

Cons

  • They charge an 8% origination fee.
  • Only two repayment terms are available to borrowers.
  • There isn’t a mobile app for managing a loan.
  • No secure loan or co-sign options.

Upstart Full Review

The underwriting model of Upstart sets it apart from other online lenders. To work if they’ll lend to you, they use AI and unconventional data such as college education, work experience, and location. Banks and other traditional lenders concentrate nearly entirely on a borrower’s credit record, obligations, income, and assets.

According to Upstart, their underwriting approach makes it easier for younger applicants and those with poor credit histories to get a loan.

Upstart is the ideal option for borrowers that meet the following criteria:

  • They’d like to be able to adjust their payment date.
  • Those in desperate need of cash.
  • They don’t need to use a mobile app to handle their loan.
  • Lenders with no credit history or poor credit.

Where Upstart stands out from the crowd

Fast funding: According to Upstart, borrowers can pre-qualify in five minutes to see their rate, and approval should take one business day.The bulk of its loans are funded one business day after a borrower signs a loan agreement, according to the company. You should expect the entire procedure to take two business days if you send your documents on time.

Upstart distributes your loan proceeds directly to your credit card issuers to streamline the debt consolidation procedure for personal loans used to pay off credit cards.

Flexible payments: Through Upstart’s online platform, borrowers can adjust their monthly payment date an infinite number of times.The original due date is not changed by changing your payment date, and the 15-day grace period for late fines applies to the original due date.

If your loan is due on the 8th of the month and you shift your payment date to the 10th, your payment will not be late because it falls within the grace period of the due date. If you postpone your payment to the 25th, you will be late and may be charged a late fee.

Borrowers can pay with a postal check, over the phone, online, or with automated payments, according to the lender.

Alternative data use: The Consumer Financial Protection Bureau credited Upstart’s underwriting approach with accepting more applications at cheaper rates than a typical underwriting model in a blog post published in 2019. Consumers with FICO scores between 620 and 660 were accepted twice as often as those with a standard credit model in a test, according to the agency, while applicants younger than 25 were 32 percent more likely to be approved.

Lenders who include data like a borrower’s college degree and employment experience in their appraisals, like Upstart, claim it offers them a better understanding of the borrower’s financial situation.

Consumer activists, on the other hand, believe it would exacerbate existing racial and economic gaps.

Where Upstart fails to deliver

Borrowers have the option of choosing a three- or five-year payback period.

A few other online lenders provide similar terms, but they’re inflexible when compared to lenders who give as many as five or six repayment term alternatives.You have more control over monthly payments and overall interest expenses if you have additional repayment plans to select from.

Origination cost: Some lenders who utilize Upstart’s online lending platform charge an origination fee, which is normal with personal loans, but it reduces the amount you can borrow. The cost charged by Upstart might range from 0% to 8% of the loan amount.

There is no smartphone app for managing a loan: Some online lenders have mobile apps that allow borrowers to make loan payments, examine their payment history, and view their most recent credit score. These functionalities are not available in Upstart.

There are no alternatives for a co-signed, joint, or secured loan: Borrowers who might not ordinarily qualify for a personal loan can benefit from adding a co-signer, co-borrower, or securing a loan.Only unsecured loans are available through Upstart.

How can I get an Upstart loan?

Prequalifying for a personal loan, completing a formal application, and waiting for loan approval are all common steps in the process.

To apply for an Upstart personal loan, follow these steps:

Prequalify.

To find out your interest rate and APR, start by filling out an online prequalification form.

The form will ask for information on your schooling, income, savings, and recent loans, in addition to your basic contact information. Receiving a rate quotation takes roughly five minutes, and Upstart will only conduct a soft credit inquiry, meaning your credit score will not be affected.

Check the balance of your bank account.

Upstart will require you to verify your bank account after you submit your rate inquiry. You may also be asked to supply supporting papers or called to verify your details. Upstart will also run a hard credit check at this time, which will appear on your credit record.

Please wait for approval.

Upstart’s AI-driven approach allows it to approve almost all loans almost instantly.Upstart authorized 71% of its loans promptly in the first quarter of 2021.

Sign the loan agreement and get your money.

Within one or two business days after you sign, the loan funds are paid directly to the borrower’s personal bank account.

Make the necessary payments.

Borrowers can locate their precise repayment date on their promissory note after loan funds are disbursed.Your first payment will be made between 20 and 40 days after your loan is approved.

Upstart debt consolidation requirements?

There is no minimum credit score.


Credit history requirements: None; applicants with credit histories too short to get a FICO score may be accepted.

A minimum of $12,000 in gross income is required.

Employment: A full-time job, a full-time employment offer that starts in six months, a regular part-time job, or another regular source of money.

The borrower must live in the United States (unless military personnel on active duty).

-You must be at least 18 years old to participate.

-A valid email address is required.
-A personal bank account with a routing number in the United States is required.

A three-year, $12,000 loan with a 20.5 percent annual percentage rate would cost $449 in monthly instalments. The total interest paid on such loan would be $4,164.