What Makes Upstart Great?
Upstart’s AI platform allows them to extend affordable credit to people who have low credit scores or little credit history, which makes additional funding available to a larger pool of borrowers. Their unique algorithms take into account a number of factors, including prior defaults and income potential, which allow Upstart to approve more loans at lower interest rates without increasing their own risk.
What’s more, Upstart does not charge penalties for early repayment, so if you decide to pay your loan off early, you will not be hit with punitive fees or interest charges. Upstart’s less stringent requirements make them a great option for recent college grads or professionals who have low debt and a regular source of income.
Do I Qualify?
Upstart’s AI algorithms are unique in that they take into consideration a number of different factors. As with any bank, they will need to determine the risk of default, so you will still need to be able to prove that you can repay the loan. Applicants must be 18 years or older, and may be higher depending on state law.
- Current and Potential Income Level: Upstart will need to know what your current income is in order to ensure that you have the resources to repay the loan. They will further consider how long you have been with your current company, in order to project your potential income.
- Savings and Investment Accounts: You will need to provide information concerning your current savings and investment accounts, to get a better picture of your current financial state.
- Other Loans and Debts: When considering your application, Upstart’s algorithm will take into account the amount of debt you currently owe, to ensure that you are not exceeding your income. In addition, they will consider whether you have defaulted on any current or past debts.
- Employment Information: Like any bank, Upstart will want to ensure that you are currently employed and have a reliable source of income. Your annual income and the amount of time you have been with your employer will help them to determine whether you are a sound investment.
- Education Level: One final aspect to consider is your level of education. Statistically, people who have completed higher levels of education have higher earning potential, so the AI will take your education into account when considering loan terms.
All of this information combined allows Upstart’s AI platform to make a more accurate decision about whether to grant a loan and determining the parameters of the loan, including repayment terms, interest rates, and loan amounts.
How Do I Work With Upstart?
Upstart offers personal loans from $1,000 to $50,000 at percentage rates anywhere from 5.67% up to 35.99%. Payment terms range from 3-5 years. Be sure to complete the “Check Your Rate” form to determine your eligibility and loan terms before formally applying for the loan. This form does not affect your credit and will allow you to review the full terms of the loan before you apply formally. The pre-qualification form requests your name, address, date of birth, income, and employer name.
Once you have been approved, double check that you have received terms that are compatible with your needs. Be sure to double check that the monthly payments are within your budget. If you are consolidating your debt, you will want to be sure that your personal loan’s interest rate does not exceed the rate you are already paying. It is equally important to double check the payoff term length and calculate your loan’s lifetime interest based on that term.
When you accept the loan terms, Upstart will ask you for proof of income and may ask for bank statements to substantiate your savings and investment accounts, so be sure to have your financial information available to upload when they ask for it. With their easy online application process, loan turnaround is quick, so you can have the loan in your bank account as soon as the day after your application is accepted.
Overall, we found Upstart personal loans to be an excellent option for young people who have a short credit history or individuals who are repairing their credit. What we liked the most:
- AI algorithm breaks the mold and considers multiple aspects of the application instead of relying heavily on FICO scores
- Interest rates are reasonable for applicants with sufficient income and debt payment history
- Low risk individuals with little or no credit can procure loans
- No punitive fees or interest payments for early payoff
OK, Let’s Get Started
Used responsibly, personal loans are an excellent tool to help ease your debt burden. They are especially useful to consolidate multiple debts or pay off high interest credit cards. For more information on Upstart, or to apply for a personal loan, visit their website today.