Upstart Review

Pros

• Financing is available to qualified entrepreneurs
• Borrower qualifications are lower than what banks require
• Rates tend to be inexpensive
• No prepayment penalties
• The application process is generally fast and easy
• Funds are disbursed quickly

Cons

• Financing isn’t available in some states
• Low borrowing amounts

Upstart Overview

Upstart is an online lending platform that offers consumer loans to qualified borrowers.

Upstart differentiates itself from other online lenders by targeting an underserved audience: young adults. Accordingly, while credit scores are a consideration, those with little or no credit history are still eligible to receive capital. The underwriting process takes various characteristics into account, such as your “education, credentials, work experience” and the aforementioned credit (if you have it). Unlike in the past, Upstart does not require applicants to have a college degree. The company will work with what you’ve got — if you don’t have a credit score or a college education, it’s not the end of the line.

While Upstart offers consumer loans, its primary focus is credit card refinancing. It’s also known for student loan refinancing and for providing loans so that people can attend coding boot camps. However, these loans can also be used for business purposes.

You’re probably wondering if Upstart offers decent rates. The answer is yes, but not uniquely so. The APRs, which currently max out at 35.99%, fall right in line with the typical rates offered by competitors.

Because these loans are tied to your personal ability to repay and not your business’s, Upstart is a very startup-friendly company. So if you’re confident enough that your startup will be able to sustain repayments, go right ahead. Upstart also lets you apply for a second loan once you’ve paid off your existing loan.

Upstart provides easy-to-get loans with excellent customer service, very competitive rates, and an impeccable online reputation. Read on for the details!

Services Offered By Upstart

Upstart offers personal loans that can be used for business, among other purposes.

Upstart Borrower Requirements

These are Upstart’s loan requirements:

Because its primary audience is consumers (not businesses), Upstart doesn’t require any time in business or a set amount of revenue.

To qualify for an Upstart loan, you must meet these requirements:

• Be a US citizen
• Be at least 18 years old (19 in Alabama and Nebraska)
• Have an email account
• Have a name, date of birth, and social security number
• Have a regular source of income
• Have a bank account
• Have a credit score of 580 or above (however, Upstart might accept applicants with insufficient credit history to produce a score)

Upstart Interest Rates & Fees

Here are the stats posted on Upstart’s website:

Note that in certain states (Massachusetts, Ohio, New Mexico, and Georgia), the minimum borrowing amount will be higher than $1,000. In addition, Upstart may charge a fee for the following situations:

• Late Payment: The larger of 5% of unpaid amount or $15
• Insufficient Funds Fee: $15
• Paper Copies Request Fee: $10

Your interest rate is determined by a number of factors that Upstart considers to evaluate how risky a bet you are. The riskier you are perceived to be, the higher your interest rate.

One factor that will affect your interest rate is your term length. Three-year loans have smaller APRs because lending somebody money for three years is less risky than five. The downside is that three-year loan terms will have higher monthly repayments.

Keep in mind that Upstart usually requires an origination fee. This fee comes right out of the principal, so if you need a specific amount of money, make sure that you ask for enough to cover the cost of the origination fee. While some customers are annoyed by this fee, an origination fee is standard in the industry.

Upstart does not charge any other fees, such as prepayment penalties, aside from the origination fee and potential late fees.

Application Process

Upstart’s application process works much like that of any other online lender. You’ll begin by filling out an online form via Upstart’s website. The form will ask you:

• How much you’d like to borrow
• Approximate credit score
• Highest level of education
• Your primary source of income
• Personal information (name, date of birth, etc.)
• Residential information
• Financial information

After you’ve completed the form, you’ll get a preliminary approval or denial. If you are approved, you’ll get an estimated rate, which details your interest rate, origination fee, and other important details about your potential loan. Use this information to decide if you want to continue the process.

Before you get an official rate, you will have to provide more substantial information, and a real human (the underwriter) will have to look through your application. During this step, you’ll be asked to provide a bunch of documents to verify all the information you provided earlier. For example, Upstart might ask you to submit transcripts, test scores, pay stubs, tax forms, and other official documentation. At this step, you’ll have to talk to an Upstart representative to verify some information. Upstart will also do a soft pull on your credit.

When you’ve submitted all that, an underwriter will go over your application and (assuming you’re accepted) make you a real loan offer. If you accept that offer, your loan will be funded.

The time from application to funding is generally less than a week. You can get an estimated quote within minutes, the underwriter typically takes 24 to 48 hours to make a decision, and funds can be transferred in one business day.

Sales & Advertising Transparency

Upstart isn’t trying to trick anybody. Almost all the relevant terms, rates, and fees are clearly stated on the website’s front page in a useful and easy-to-understand manner. You shouldn’t come across too many surprises during the application and funding process.

Customer Service & Technical Support

Upstart offers an FAQ, though it isn’t terribly comprehensive. If you can’t find an answer to your question in the FAQs, Upstart is available by email or phone. Although some customers have reported difficulty getting in touch with the staff, most customers express satisfaction with the customer service representatives’ promptness and level of support.

Upstart Reviews, Complaints, & Testimonials

Negative Upstart Reviews & Complaints

This company has a stellar online reputation. That’s not to say it’s completely devoid of negative reviews (we’ll get to those in a moment), but a 4.9 out of 5 on Trustpilot (based on over 8,000 reviews) isn’t easy to maintain. The company also has a very good record on Credit Karma and is accredited by the BBB with an A rating. However, you’ll find some poor reviews of the company on the BBB page as well.

Here are the most common Upstart complaints I came across regarding its loans:

• Rejections: The majority of negative reviews are from customers who were rejected for a loan for one reason or another. Unfortunately, Upstart may find reasons to reject you, even if you met the minimum qualifications or got a preapproval letter in the mail.
• Origination Fee: A few reviewers claim they were not aware of the origination fee before accepting a loan. However, I saw the fee disclosed multiple times across the website. The origination fee is taken directly out of the principal, so if you need a certain amount, ask for a slightly higher amount when applying to cover the extra cost.
• Customer Service: Some customers have complained that they’ve had trouble getting in touch with customer service.
• Lengthy Approval Process: Several recent reviews posted by would-be borrowers on the BBB site mention a lengthy approval process riddled with hiccups. A recent response from the company regarding just such a complaint notes, “servicing volumes are currently higher than normal causing a delay in timely responses.”

Positive Upstart Reviews & Testimonials

Customers have a lot of good things to say in their Upstart reviews. Most commonly, they praise the:

• Customer service
• Smooth application process
• Lenient underwriting
• Quick time to funding

Upstart’s flexible repayment schedules also set it apart from its competitors. As with many P2P lenders, once your due date has been set, it’s not possible to change it. However, Upstart has a convenient solution to this problem: Customers can set up monthly recurring payments at any time before their actual due date. You can even set up bi-weekly repayments if that works better for your finances.

Final Verdict

Because this lender is willing to evaluate non-traditional sources of creditworthiness, Upstart is an excellent resource for many people who do not fit the traditional model of a loan borrower. If you don’t have an established credit history for whatever reason, you may still qualify for affordable rates from this lender. If Upstart ends up not being a good fit for your business, be sure to check out our list of top-rated providers of startup loans for bad credit to find plenty of other options.

Although there are a few complaints circulating about Upstart, it’s evident that most borrowers have an excellent experience. Furthermore, those complaints are common in the loan industry at large; you risk being turned down for a loan or paying extra fees from any of Upstart’s competitors as well.

Again, anyone considering getting a business loan from Upstart should make a few comparisons before settling on a lender. Most lenders will be able to give you an estimated rate without affecting your credit. If you’re curious about your other options, check out our full list of startup business loan reviews.

Jump back to top

The Merchant Maverick Seal of Approval 🏆

Upstart	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Upstart for yourself.

The Merchant Maverick Seal of Approval 🏆

Upstart	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Upstart for yourself.

Sources