You've seen us mention Upstart, a digital peer-to-peer lending platform in a lot of our most popular debt posts (here and here) for example. Like many other loan providers on the web, they exist to help you lower your credit payments, reduce interest rates, and improve your credit score by consolidating and refinancing loans, credit card payments, and other types of debt into one monthly payment. Unlike other loan providers on the internet, Upstart is different – but in a good way. Here's my full Upstart Personal Loans review and why I think they stand out above the rest.
How I Learned About Upstart
At one point, I considered dipping my toe in the world of money coaching. I was working with a client and recommended she consolidate some of her credit card debt so she could save money each month to build up an emergency fund. I mentioned one provider I was working with at the time, (whom I am no longer partnering with) and she came back and said she got denied because her credit score was too low to qualify.
She continued looking around and was able to get her debt down by qualifying for a loan through Upstart, which takes other factors – like employment history and education – into account on top of your credit.
Full disclosure – I personally have not used Upstart to consolidate debt (I've not had the occasion to) but after hearing from others that have used them and extensively chatting with the Upstart team as an affiliate partner, I'm happy to recommend them to my readers. Here's why.
An Upstart Personal Loans Review – The Features That Make It Different
How Upstart works is that you're taking out a fixed rate installment loan from them, and you get to set the terms. Typically you pay it back between 3-5 years.
What all that terminology above means is that you can take out an amount (say $5,000) and pay it back in monthly installments over a certain period of time (which you get to choose.) Obviously, the shorter the term, the lower the interest rate and the less you’ll pay in interest.
You'll get a payment from Upstart which you'll use to pay your credit/loan accounts in full, and instead of six or seven monthly payments to your creditors, you’ll have just one payment.
And trust me, if you’ve got decent credit you’ll get a much lower interest rate than the 15-24% you're currently getting on your cards. But here's what I really love about Upstart.
- You can borrow $1,000 to $50,000 at fixed rates starting 4.66%. Depending on the rate you qualify for, this will significantly lower the amount you pay in interest, assuming your average credit card interest rate is above 18%.
- You'll get a rate based on more than just your credit score. Upstart also considers education, work history, and earning potential to supplement your credit profile, so you may be able to get approved with them when other lenders turn you down.
- You can get your rate in 2 minutes without affecting your credit score! In preparing for this Upstart review I walked through the steps for applying myself and it was SO easy.
- No prepayment penalties or hidden fees. This is HUGE. If you're serious about paying off debt, you should go with a lender that won't charge you a fee for being motivated and paying it off early.
How to Get an Upstart Loan
Go to the homepage and click “Check Your Rate.”
Fill out the form. You'll need to know your approximate credit score, which you can get for free checking it here, with Credit Sesame.
BONUS: Simply checking your rate with Upstart will not affect your credit score.
Then you'll go to a screen where you can see the personal loan rate Upstart is offering and select your terms (either a 3 or 5 year loan.)
At this point, they'll ask you for supporting documentation, your social, and the bank account where you want to receive the funds. It's super simple and they offer both phone and email support.
But I recognize that it is a very real concern for a large portion of millennials: the average college graduate leaves school with an average of $29,000 in student loans.
Upstart Personal Loans Also Work for Consolidating Student Loans
Having large-but-necessary debt from a college education makes it hard to save money for other things: retirement, fun trips, home ownership, your kid's college…. the works.
Which is why in trying to bone up on my student loan resources on this site I wanted to highlight both people (read my friend Kayla's story on how she paid off $91k in student loans in under three years) and great companies seeking to help millennials reduce their loan debt.
We've covered this before, but debt is very expensive. Sometimes (as in the case with student loans,) it is unavoidable, but we should try to save money and grab the lowest interest rate where we can. Lower interest rates = less money spent on interest over the life of the loan.
It also means you can pay off debt faster and easier and get on with your life already!!!
Here's a little math for you:
Say you have $40,000 in student loans at 9.9% interest and ten years left on your repayment. By refinancing to a 7% interest rate, you lower your monthly payment by $100 and save over $13,000 in interest over the next ten years.
$13,000! Yes, that is a downpayment on a house.
Why It Works for Student Loans Especially
Very few platforms allow you to apply for refinancing such ease. Here's a handful of other reasons why I love this option:
- Borrow $1,000 to $50,000 at fixed rates from 4.66%
- Rates that consider education, work history, and earning potential to supplement your credit profile
- Get your rate in 2 minutes without affecting your credit score!
- No prepayment penalties or hidden fees (this is huge, you should be able to pay off your debt WHEN YOU WANT, WHENEVER YOU WANT! Insist on it!)
One of my coaching clients, Sarah, wanted to lower the amount she was paying each month to allocate more funds to her financial goals. Her credit score was too low for other options like SoFi and Payoff, but Upstart looked at her stellar school record and approved her. Yay!
As you can see, Upstart is offering interest rates lower than many private lenders (Starting at 4.99%). Just make sure whichever route you go that you are getting a LOWER interest rate than what you had before, otherwise you won't be saving any money.
And then ask yourself, how much money are you leaving on the table by not researching potential refi options? Click here to explore your options with Upstart.
Here's the Final Argument for Using Upstart Personal Loans
The thing I love most about Upstart is that they take into account other factors besides credit score. Obviously, if you have a high debt-to-income ratio because of large student loans or credit card debt, your credit may not be bad, but it might not be stellar enough to qualify for other lenders. Good people with less than perfect credit need help getting out of debt too, and I'm so excited there's finally a lender out there who GETS IT.
Let's face it – we all find ourselves in debt at some point or another. Instead of beating yourself up about it, create a plan for how you're going to get out and be smart about it. Sure, you can hustle and make extra payments, which will definitely help you get out of debt, but in order to be really smart you need to take extra measures to lower your interest rates. By combining extra funds with lower interest rates, you'll blast through that debt in no time!