Detail Review Across 11 Criteria: Upstart Personal Loan versus Upgrade Personal Loan. Which personal loan is right for you.
We’re going to compare personal loans from Upstart and Upgrade. We’ve spent years working in the lending industry and we track dozens of lenders. We want to break down these two lender so you can see which one might be better for your situation. Before we get started, please consider subscribing to our channel so we can continue to bring you content like this.
The first thing we are going to look at is the loan amounts that they offer. Both Upstart and Upgrade will lend as little as $1,000. So, they aren’t a bad place to turn if you need just a little bit of money for a short-term emergency. That minimum is pretty good, so I will highlight both of them. If you are look for a more substantial amount of money, both of them will lend up to $50,000. That is a pretty decent maximum loan amount, so I will highlight both of them again.
Loans from Upstart have terms between 3 and 5 years. I am a bit concerned about a $1,000 loan at a three year term. That’s just too long to pay that amount of money back. That will mean paying a lot more interest than you should for what is a small loan. Upgrade’s terms range from 2 to 7 years. Even for $50,000, seven years is a long time to be in debt. No matter how long your loan is, if you make extra principal payments in the first 6-8 months of the loan, you will save a lot of money on interest over the course of the loan.
Now let’s look at the cost of the loans. Upstart’s minimum APR is 7.80% and Upgrade’s minimum is 8.49%. 7.8% is one of the lowest minimum APRs in the industry. So, I will highlight them. But, you should know that only about 10% of applicants are likely to get a lender’s lowest APR, so keep that in mind when you apply. Both of them have maximum APRs that cap out at 35.99%. There is nothing particularly special about that top rate, so I will not highlight either one of them.
Upstart has one of the broadest ranges for origination fees in the industry. Their fees range from 0% all the way up to 12%. Obviously, zero is a great number. But 12% is about as high as anything in the industry. Upgrade charges between 1.85% and 9.99%. Any origination fee above 6% gets to be a little on the high side. But I will highlight Upgrade since they have a lower top rate. The origination fee is a percentage of the borrowed amount and comes out of the proceeds of the loan. So, if you borrow $10,000 and have a 5% origination fee, you will receive $9,500 but will still need to repay the $10,000. Remember that the origination fee is accounted for in the APR. In other words, the APR is the origination fee plus the interest rate. All things being equal, you want a lower origination fee if you plan on paying off your loan early. Paying off early will save you on the interest you would have paid, but you don’t get a reimbursement of the origination fee.
Upstart doesn’t offer any particular discounts, but Upgrade will give you a discount if you sign up for Autopay, if you use their loan to consolidate other debt, or if you use your motor vehicle as collateral for the loan. Keep in mind that in order to get the autopay discount, you will need to attach your bank account at the time you accept the loan. If you sign up later, you will not receive the discount. I will highlight Upgrade for offering ways to lower your APR.
Both Upstart and Upgrade target borrowers who have credit scores between 620 and 700. They will lend down to 620, but that doesn’t mean that you are guaranteed to be accepted. These are guidelines. Lenders don’t usually use credit score to determine eligibility. They usually use information like payment history, debt-to-income ratios, utilization, income, and other financial information. Upstart also claims to use level of education in their algorithm. Although they make a point of the fact that there is no minimum level of education needed to apply.
Upstart only offers unsecured loans. Of course, an unsecured loan is not guaranteed with collateral. That means that if you have difficulty paying the loan back, the lender can’t come after your car or home. Upgrade offers unsecured loans as well, but they also provide the option to secure your loan with the title to your motor vehicle. Normally, it’s not a good idea to risk losing your assets when borrowing money, especially if you can help it. But, securing a loan can increase your chances of approval, or getting more money, or getting a lower loan amount. You just need to be careful that you aren’t putting yourself in a worse situation if bad financial luck hits. I will highlight Upgrade for having more options, though.
Upstart will not accept a cosigner on your loan application, but Upgrade will. A cosigner is someone who agrees to pay off your loan if you fail to repay it. If you can qualify for the loan that you need, there is little reason to entangle a loved one in the process. But, if you have a spouse or loved one that has a stronger credit profile than you do, adding them as a cosigner might make all the difference in getting the loan you need. It’s good that Upgrade offers this option.
If you are using the loan to consolidate other debt, Upgrade will directly pay off those other creditors with the proceeds of the loan for you. Upstart will not. Not only is this convenient, it shows that they know this loan will replace your other debts and not just stack on top of them. Because it won’t make your debt-to-income ratio worse, it should make it easier to be approved with them.
If you are late on a payment, Upstart will charge either $15 or 5% of the late amount, whichever is greater. Most lenders will charge a late fee and that’s a fairly standard rate, but Upgrade will only charge a flat rate of $10. For the lenders that charge a late fee, $10 is the lowest I have seen, So, we will highlight them.
Both of these lenders will charge you if your payment fails, usually because you don’t have enough money in your account. Upstart calls this an ACH return fee and Upgrade calls it a failed payment fee. Upstart will also charge you if you want paper copies of the loan agreement, bills, and stuff like that. I will highlight Upgrade because they have fewer fees and the fee they do have is lower.
So, let’s summarize what we know about Upstart Personal Loans and Upgrade Personal Loans.
Upstart and Upgrade offer very similar Personal loan sizes at similar APRs. What sets Upgrade apart is that they have significantly more features: discounts, loan types, and options for borrowers. They also have lower fees. That being said, I don’t think Upstart is a bad lender. For many people, the most important thing is whether a lender would give them the money that they need at the lowest possible APR. If Upstart would give you the money you need at a lower cost, there’s no reason you shouldn’t go with them. That’s why we always recommend that before you accept a loan, you should shop around. Find the best deal. At The Yukon Project, we’ve tried to make shopping around easy. If you visit our marketplace page, you can apply to any one of our other featured lenders. Behind the scenes, we will check your rate with up to 40 other lenders. Our partners use a soft credit check, so applying won’t hurt your credit score. We will show you all of the approved offers so you can pick the loan that’s best for you.
If you have any questions about either one of these lenders that we didn’t cover, leave a comment below and we will try and answer it. If you found this video useful, please like it and subscribe to our channel. Thanks for watching.
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