When it comes to personal loans, finding the right lender can make a big difference in terms of interest rates, loan terms, and the overall borrowing experience. Upgrade and Upstart are two popular online lenders that offer personal loans, but they cater to slightly different audiences and have unique features that set them apart. In this blog post, we’ll compare Upgrade and Upstart personal loans to help you determine which one might be the best fit for your financial needs.
Upgrade Personal Loans Overview
Upgrade is an online lender known for offering personal loans, credit lines, and credit cards with a focus on providing accessible credit options to a wide range of borrowers. Their personal loans are unsecured, meaning no collateral is required, and they offer flexible terms and competitive rates.
Key Features of Upgrade Personal Loans:
- Loan Amounts: $1,000 to $50,000
- APR: 8.49% – 35.97%
- Loan Terms: 24 to 84 months (2 to 7 years)
- Origination Fee: 1.85% – 9.99% of the loan amount
- Credit Score Required: Minimum 560
- Funding Time: As soon as one business day after approval
- Application Process: Online, with prequalification available
- Prepayment Penalty: None
Pros of Upgrade Personal Loans:
- Quick Funding: Borrowers can receive funds as soon as one business day after approval, making it ideal for those needing fast cash.
- Flexible Repayment Terms: Loan terms range from 2 to 7 years, allowing borrowers to choose a repayment schedule that fits their budget.
- No Prepayment Penalty: You can pay off your loan early without incurring any fees, helping you save on interest.
- Low Credit Score Requirement: With a minimum credit score requirement of 560, Upgrade is accessible to a wide range of borrowers.
Cons of Upgrade Personal Loans:
- Origination Fee: The origination fee can be as high as 9.99%, which is deducted from the loan proceeds.
- Higher Interest Rates for Poor Credit: While Upgrade accepts lower credit scores, borrowers with poor credit may face higher interest rates.
Upstart Personal Loans Overview
Upstart is an online lender that uses an innovative, AI-driven approach to assess creditworthiness. Unlike traditional lenders that focus primarily on credit scores, Upstart considers factors such as education, job history, and income. This unique approach helps them offer loans to borrowers who might not qualify through traditional methods.
Key Features of Upstart Personal Loans:
- Loan Amounts: $1,000 to $50,000
- APR: 6.50% – 35.99%
- Loan Terms: 36 or 60 months (3 or 5 years)
- Origination Fee: 0% – 8% of the loan amount
- Credit Score Required: Minimum 300 (or none if sufficient other criteria are met)
- Funding Time: As soon as one business day after approval
- Application Process: Online, with soft credit check prequalification
- Prepayment Penalty: None
Pros of Upstart Personal Loans:
- Flexible Credit Requirements: Upstart’s unique underwriting model allows borrowers with limited credit history or lower scores to qualify for loans.
- Competitive APRs: For those who qualify, Upstart offers relatively low starting APRs, especially for borrowers with good credit and other strong qualifications.
- Fast Funding: Like Upgrade, Upstart can provide funding as soon as one business day after approval.
- No Prepayment Penalty: You can pay off your loan early without additional costs.
Cons of Upstart Personal Loans:
- Limited Loan Terms: Upstart only offers 3- and 5-year loan terms, which may not be ideal for those looking for more flexible repayment options.
- Origination Fees: Although the origination fee is lower than Upgrade’s in some cases, it can still go up to 8% of the loan amount.
Upgrade vs. Upstart: Side-by-Side Comparison
| Feature | Upgrade Personal Loans | Upstart Personal Loans |
|---|---|---|
| Loan Amounts | $1,000 – $50,000 | $1,000 – $50,000 |
| APR Range | 8.49% – 35.97% | 6.50% – 35.99% |
| Loan Terms | 24 – 84 months | 36 or 60 months |
| Minimum Credit Score | 560 | 300 (or no score requirement) |
| Origination Fee | 1.85% – 9.99% | 0% – 8% |
| Funding Time | As soon as one business day | As soon as one business day |
| Prepayment Penalty | None | None |
| Credit Evaluation | Traditional credit and income factors | AI-driven model considers education, job history, and income |
| Best For | Borrowers seeking flexible terms and fast funding | Borrowers with limited credit history or strong non-credit factors |
Which Loan Is Right for You?
Choose Upgrade if:
- You Need Flexible Loan Terms: Upgrade offers loan terms ranging from 2 to 7 years, giving you more options to tailor your repayment schedule.
- You Want Fast Access to Funds: If you need quick funding, Upgrade’s streamlined process can get you money in as little as one business day after approval.
- You Have a Low Credit Score: Upgrade is accessible to those with credit scores as low as 560, making it a viable option for individuals looking to improve their financial situation.
Choose Upstart if:
- You Have a Limited Credit History: Upstart’s unique approach considers more than just your credit score, so if you have a strong education and job history but limited credit, Upstart may offer better rates and approval chances.
- You Want a Lower APR: If you qualify, Upstart’s starting APRs are slightly lower than Upgrade’s, potentially saving you money on interest over the life of the loan.
- You’re Comfortable with Shorter Terms: With just two loan term options (3 or 5 years), Upstart is best for those who are comfortable with shorter repayment periods.
Final Thoughts
Both Upgrade and Upstart offer compelling personal loan options, but the right choice depends on your financial situation and needs. Upgrade is ideal for those seeking flexible repayment terms and quick access to funds, especially if you have a lower credit score. Upstart, on the other hand, is a great choice for those with a strong non-credit profile who may benefit from its unique underwriting approach.
Before choosing a lender, it’s essential to compare your prequalification offers, considering factors like APR, fees, and loan terms. By understanding what each lender offers, you can make an informed decision that best supports your financial goals.