Upstart vs. Upgrade: Which Personal Loan Is Right for You?

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Edited byKatherine Kurtz

Updated: July 25, 2023

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Upstart is a lending platform powered by artificial intelligence that links borrowers to its lending partners. In contrast, fintech firm Upgrade issues credit cards and personal loans while offering free credit health tools to help customers practice healthy financial habits.

For this comparison, MoneyGeek gathered all the essential, up-to-date information on Upstart and Upgrade personal loans to help borrowers like you decide between these two lenders. We’ll go into detail about their interest rates, credit requirements and more.

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Upstart vs. Upgrade: Overview

The following sections compare these two personal loan lenders in terms of their respective loan amounts, APR ranges, time to disburse loans, repayment flexibility and minimum credit score eligibility.

Both lenders offer the same maximum and minimum loan amounts but have significantly different requirements for approval based on credit scores. And although there is no difference between the two in repayment terms, Upgrade has faster funds disbursement time than Upstart.

Upstart

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Upgrade

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APR Range

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Upstart offers personal loans at APRs ranging from 3.22% to 35.99%. In contrast, Upgrade has APRs ranging from 5.94% to 35.47%, depending on creditworthiness. Both lenders have a high maximum, but Upstart has a slight edge over Upgrade for its lower minimum.

The APR, or annual percentage rate, is the rate of interest that a borrower must pay back annually on a personal loan. Your credit score and risk profile significantly impact your loan's APR. Rates may also be affected by the loan type, size, term and other variables. APR ranges can also vary widely among lenders.

Although getting the lowest possible interest rate is ideal, APR is just one factor among many in choosing a personal loan lender.

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MONEYGEEK’S VERDICT

Upstart is the winner in this comparison because it offers APRs as low as 3.22%, depending on the borrower's creditworthiness. Individuals with good credit can benefit most from Upstart's low APR.

Note that the APR increases a loan's total cost. In other words, a loan with a lower APR will cost less over time in interest and fees. Therefore, a lower APR is preferable to a higher APR because it reduces the loan's overall cost.

Before committing to a lender, it is advisable to shop around and compare your options.

Minimum Credit Score

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Upstart accepts applicants with bad credit or insufficient credit history, subject to some conditions. Whereas Upgrade requires a minimum credit score of 560 to be eligible for a personal loan, Upstart only requires a credit score of 300. This 260-point difference is substantial.

Your credit score is a numerical representation of your creditworthiness issued by the major credit bureaus based on information from your credit report. Lending institutions use it to set your APR and loan terms and, ultimately, decide whether to grant your loan.

Credit scores generally vary from 300 to 850. Lenders often consider applicants with credit scores of 670 or above as acceptable or low-risk borrowers, making these individuals prime candidates for quick, easy approval.

Note that factors like your credit and payment history, outstanding balances, types of credit accounts (credit cards, mortgages, loans) and new applications for credit accounts can affect your score.

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MONEYGEEK’S VERDICT

Again, Upstart is the clear winner in this category because it caters to applicants with bad credit or no credit history. However, a low credit score may result in a higher APR, increasing the overall cost of the loan. Regardless, there are other factors to consider when deciding which lender is ideal for you.

Loan Amount Range

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In terms of loan amounts, both companies offer loans between $1,000 and $50,000. The loan range refers to the maximum and minimum amount applicants can borrow from the lender. Your ideal loan amount will depend on your intended use of the funds and how much a lender is prepared to offer you.

Many personal loan providers start with limits of around $5,000, which is unsuitable for someone who needs to borrow lower amounts. Despite the lender's maximum, your loan amount will rely on several factors, including your creditworthiness, the loan's repayment period, its purpose and other lender-specific criteria. Consequently, choosing a lender willing to customize your loan amount is essential so you can get the sum you need.

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MONEYGEEK’S VERDICT

Upgrade and Upstart provide identical maximum and minimum loan amounts, resulting in a tie in this comparison.

The amount you need depends on your situation and the intended use of funds. Although a smaller loan is ideal for more minor needs, a more extensive loan range is suitable for bigger expenses like debt consolidation and home repairs. You don't want to borrow more money than you genuinely need. Hence, knowing how much money you require before choosing a lender is crucial.

Repayment Terms

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Upstart and Upgrade offer personal loan repayment for a minimum of 36 months and a maximum of 60 months.

A personal loan's repayment term dictates how long a borrower can take to pay it back. Long-term loans can extend up to 84 months, and short-term loans can range from 12 to 24 months. A lengthier term duration accompanies lower monthly payments but can increase total costs in the long run. Securing a loan with the shortest repayment and affordable installments is in your best interest. However, your optimal repayment term will rely on your unique circumstances.

Your credit score can be one of the elements influencing your loan's repayment term. Your debt-to-income ratio and monthly income can also affect your ability to repay, so lenders often use those factors to determine your repayment term.

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MONEYGEEK’S VERDICT

Upstart and Upgrade offer loan repayment terms between 36 and 60 months, which can be advantageous for those seeking loans for either shorter or longer periods.

Interest rates are often lower for loans with shorter repayment terms, but monthly payments may be higher. Again, the choice of the repayment term is at the borrower's discretion and based on their specific circumstances. However, you must consider the complete picture of the loan and lender-related factors to make a well-informed choice.

Time to Receive Funds

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There is no discernible difference between the two lenders in terms of the amount of time they take to receive funds from them. In most cases, loans successfully verified and processed by Upgrade are deposited into the borrower's account on the same business day. Conversely, the minimum time to process loans through Upstart is one business day.

Applying for the loan online is your best bet to get the money you need as quickly as possible rather than applying in person. Most loan companies allow you to check if you prequalify before applying without affecting your credit score. Additionally, supplying all relevant documents might increase the likelihood and speed with which your application is approved, resulting in faster loan disbursements.

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MONEYGEEK’S VERDICT

Upgrade has a slightly quicker loan disbursement time among the two lenders, an advantage because the borrower has a better probability of receiving the funds in their account the same day of application approval. This would be most important to borrowers in more urgent need of funds. However, it's still best to consider the scope of factors while evaluating the loan and the lender.

Final Thoughts

Choosing between Upgrade and Upstart for a personal loan can be tricky due to their similarities. Both lenders offer the same loan amount limits, making it difficult to choose based on this factor alone.

Unless you have a short credit history or low credit score — in which case you would be limited to Upstart — you can choose either lender. However, borrowers with good credit scores can benefit from the competitive interest rates offered by Upstart; they are eligible for loans with APRs as low as 3.22%.

Upgrade offers more leeway in the repayment terms compared to Upstart. The lender has the best alternatives for short-term or long-term loans. Upgrade may also suit those in immediate need of funds.

In light of the information above, MoneyGeek concludes that:

  • Upgrade is the better option for borrowers needing flexible repayment terms or emergency funds.
  • Upstart is ideal for borrowers looking for a lower-APR loan or those with bad or no credit.

Frequently Asked Questions About Personal Loan Lenders

To help you choose the best lender for your situation, we've answered a few commonly asked questions about personal loans below.

Typically, lenders require documents to prove your identity, address, income, employment and debt to verify your eligibility and approve a personal loan.

You may get your free credit report, including your credit score, by visiting the Annual Credit Report website. You may also request by phone or submit a form at their office.

Most lenders, including Upstart and Upgrade, make a soft credit inquiry to determine prequalification and a hard credit inquiry during the application process.

No. Personal loan interest rates vary widely across lenders.

It depends. Application fees, origination fees, late payment fees and prepayment penalties are the main costs associated with personal loans. But not all lenders impose all of these charges.

If you have all the necessary documents handy, it is best to apply for a personal loan online. This saves you time and increases your likelihood of faster approval and funding.

Yes, you are allowed to prepay your loans. However, some lenders impose a prepayment penalty.

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The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.

Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team.