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Upgrade credit card debt consolidation loans: pros and cons to help reduce your high interest

Welcome to The Yukon Project. We’ve analyzed millions of credit reports, hundreds of thousands of people’s financial data, and designed programs to help people improve their financial lives. We’re here to give you the inside perspective on whether to use Upgrade to consolidate your credit card debt. 

Pro’s of a credit card debt consolidation loan from Upgrade

Well, Upgrade’s got a lot going for it, actually. I’ll get started with the pros. Then we will dive into the cons of their loans. I will also tell you about how you can be sure you’re getting the best deal. Let’s go.

Lending to people with fair credit

One great thing about Upgrade is they will lend to people with fair credit. It isn’t just for people with good to excellent credit. If your credit score is in the mid-600s, you could get approved by Upgrade.

Secured loan options

Another good thing about Upgrade is that they do offer the option of securing your credit card consolidation loan with your motor vehicle. Now, normally, it’s not a great idea to take unsecured debt and turn it into secured debt. You risk losing your car doing that. But, if lenders won’t approve you, give you enough money, or give you an APR that makes it worthwhile, offering security can make the difference. And if credit card consolidation gives your month-to-month finances a little more breathing room, you might feel comfortable using your motor vehicle as collateral. Not all lenders offer secured loans for credit card consolidation, so Upgrade might make the difference.

Rate discounts

Another pro is that Upgrade offers a few discounts that can help you lower the interest you pay. The three main discounts include: securing your Upgrade loan with your motor vehicle, signing up for autopay, and using the loan for debt consolidation.

Direct pay off

When it comes to credit card debt consolidation loans, I think it is definitely a pro that they will pay your credit cards off for you instead of just sending you the money and letting you do it. This is definitely convenient, but there’s another reason why I think it’s important. It shows that they are accounting for the fact that this loan will replace other debts. That should make it is easier to clear their debt-to-income threshold. In short, it should be easier to be approved compared to a lender that does not offer direct pay off, especially if you have substantial credit card debt.


Another positive thing about Upgrade is that they accept cosigners on their loans. A cosigner would be responsible to pay back the loan if you fail to. If you can qualify for the debt consolidation loan that you need on your own, there is little reason to entangle your spouse or loved-one in the process. But, adding a cosigner to your loan increases the chances of being approved. It can also help you get a good interest rate and be approve for a larger loan amount. This is especially true if your cosigner’s credit score is better, debt-to-income ratio is lower, or income is higher. Being able to add a cosigner is another way that Upgrade can help people who normally wouldn’t be able to get a loan.

Upgrade is a good company and I think they’ve done a pretty good job of building a loan with the features that are good for people trying to consolidate their credit card debt. But, there are three potential cons that you ought to be aware of.

CONs of a Credit Card Debt Consolidation Loan From Upgrade

The cons of using a credit card debt consolidation loan from Upgrade revolve mainly around their cost.

Origination fees

Upgrade charges an origination fee between 1.85% and 9.99%. Origination fees are fairly common, although not all companies charge them. Ten percent is a fairly high fee, so you would want to pay particular attention to what they offer you.

There are two things you need to be aware of when it comes to origination fees. First, the fee comes out of the proceeds of the loan. That means that if there is a 5% origination fee on a $10,000 loan, you will receive $9,500 dollars but still be expected to pay back $10,000. The second thing you need to be aware of is that you don’t get a prorated reimbursement of the origination fee if you pay the loan back early. So, if you are planning to be aggressive about paying your loan off early (and you should), the origination fee will be a sunk cost. So, if you have two loans with the exact same APRs, you might want to pick the one with the lower origination fee.

Late fees

Upgrade also charges a $10 late fee, which isn’t as high as many other companies, but they also charge a failed payment fee of $10. Since most people will use ACH to make their payments, you could very well get hit by both fees whenever you are likely to get it with one of them.


The last con is the APR. Now, their APR range is not bad, it goes from 8.49% to 35.99%. If you can get the low end of that range, that would be spectacular…but you aren’t likely to. That’s really low, especially given where interest rates are right now. And if you are someone with a credit score in the mid-600s, you might not even be approved for an APR that would low enough to bother consolidating your credit card balances. A good rule of thumb is that you shouldn’t consolidate unless you can get a loan that is 2-3 percentage points lower than your current credit cards. If you can’t, you’re better off just making extra payments on your credit cards and pay them off as they are.

So, one of the most important things you can do when you are looking to consolidate is to shop around. Getting the lowest interest rate you can get may mean the difference in how quickly you can become debt free. At the Yukon Project, we’ve tried to make shopping around easy. If you visit our marketplace page, you can apply directly to Upgrade. Behind the scenes, we will check your rate with up to 40 other lenders. The application uses a soft credit pull and so it won’t affect your credit score. We will show you all the companies that approve you, so you can pick the loan that is best for you.

Upgrade is a good company with a lot of good features for someone who is trying to pay off their credit card balances. But, you never know whether they will offer you the lowest rates. So, shop around.


Soft Credit Pull, Up To 40 Lenders at Once, see what you’re approved for!

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Jonathan Walker