Upstart Debt Consolidation Review

Looking for a way to bring all your loans into one? Upstart makes its services available to anyone bogged down by bad borrowing experiences from the past. See if Upstart can help you get your debts under control.

Upstart Debt
Its Underwriting Algorithm Best for
3 /5
Rating
$ /mo
Starting Price
Visit Site
Table of Contents

    Terms, Fees and Rates 2020

    Loan Amounts

    Between $1000 and $50,000

    Loan Terms

    3 and 5 Years

    Rates APR

    Between 8.13% and 35.99%

    Min. Credit Score

    620

    Late Payment Fee

    5% or $15

    Origination Fee

    Up to 8% 

    Pros

    • Approvals are near instant, and your debts could be transferred on the same day
    • Consolidate up to $50,000
    • Good customer service
    • You’ll only receive a soft pull to your credit rating on initial application
    • No prepayment penalties
    • Upstart’s underwriting AI algorithm is 27% more likely to get you approved than a traditional credit review

    Cons

    • Upstart doesn’t allow cosigners
    • You can only choose either a three or five-year repayment term
    • Potentially high origination fees

    Why should you consolidate your loans with Upstart?

    Upstart was founded in 2012 by four former Google employees who were frustrated by the reliance placed on credit scores by traditional lenders. They discovered that while 80% of Americans have never defaulted on a credit product, only half were accessing the best loan rates. 

    To counteract this, the team at Upstart created an AI algorithm that takes into account much more than your credit score, including job history, college education, and residence to determine what interest rate you might pay. 

    Upstart claims to use 1,500 different data points outside of your credit score. This makes it a good place to go if you have fair to middling credit, or feel you’ve been hard done by with other lenders.

    This can also help out younger lenders that don’t have very long credit histories or those who might be high earners but haven’t done much borrowing in the past.

    Upstart is a debt consolidation and personal loan intermediary. This means it’ll put you in touch with multiple lenders that have chosen to use Upstart’s AI program to determine interest rates. H

    owever, Upstart doesn’t say exactly how many lenders it’s currently partnered with, so it can be difficult to say how much of a range of choice you’ll get.

    You can expect the following average terms and conditions when you consolidate with Upstart:

    • Consolidate between $1,000 and $50,000 of debt
    • Choose a three or five-year repayment schedule
    • Interest rates between 8.13% and 35.99%
    • All interest rates are fixed
    • Get funding within one business day after completing your application
    • Some lenders may charge origination fees between 1% and 8% of the loan value. You’ll need to review your offers carefully to check what charges will apply
    • Late fees may also be applied. These will generally be the higher of 5% of the total payment, or $15
    • There are no prepayment penalties on any loans
    • A hardship program is available at Upstart’s discretion, which will suspend loan payments for those that have lost their jobs
    • Upstart claims to save you on average 19% of your total payments over the lifetime of the loan compared you your current provider
    • Initial inquiries will only cause a soft check on your credit rating

    The interest rates are a little higher than you might find at some of Upstart’s competitors, but the ease with which you can apply, and the openness to those with lower credit scores, mitigate this somewhat.

    What are the eligibility requirements?

    Upstart has only basic requirements for you to apply, including:

    • Be at least 18 years old (19 in Alabama or Nebraska)
    • Be a US citizen (or permanent US resident)
    • Have a valid US bank account
    • Have a valid email address
    • Evidence of a regular source of income from a full-time job
    • You must have no bankruptcies on your credit report
    • You should have no more than six hard credit inquiries on your credit report in the previous six months
    • Debt consolidation with Upstart isn’t available to those living in Iowa or West Virginia

    While Upstart’s underwriting algorithm is designed to use other factors beyond your credit rating, you’ll still need a minimum score of 620 to consolidate your debt.

    Upstart also claims that those with credit scores of between 620 and 660 were 27% more likely to be approved using its underwriting algorithm than those applying using traditional credit review methods. In addition, applicants under 25 years are 32% more likely to be approved than at Upstart’s competitors.

    Upstart doesn't allow the use of a cosigner to help your application. So if your credit score is below 620, or you have a history of missed payments, you might be better off trying a lender that specializes in helping those with bad credit. You may end up paying higher interest rates, but debt consolidation usually helps save you money.

    How to apply for a Upstart debt consolidation loan

    Around 70% of all Upstart’s loans are fully automated, meaning there’s no human involvement at any stage of the process. This allows for near-instant approval or rejection of your application, and the transferal of your funds within one business day. However, this reliance on AI won’t be for everyone and there are those who’d prefer to have their application reviewed more closely.

    The application process itself is incredibly easy and can be completed in just a few steps:

    Step 1

    Choose “Debt Consolidation” from the drop-down menu on the home page

    Step 2

    Click “check your rate”

    Step 3

    Enter how much you’d like to borrow

    Step 4

    Fill in some basic personal details

    Step 5

    Create your online account

    Step 6

    You’ll then get a range of quotes to choose from

    Once you’ve selected the debt consolidation loan you’d like, you’ll get instant approval or rejection. Upstart is very transparent through the whole process and you’ll be told exactly why you were rejected for a loan. This can help you make improvements to your financial situation in order to get accepted in the future. If you’re still not satisfied, you can contact Upstart customer support.

    Upstart may ask you to apply again if you feel your circumstances have changed, but you’ll have to create a new account using a different email address, which may be a little inconvenient for some.

    Customer service

    Upstart has a comprehensive FAQ and troubleshooting page on its website that should cover most questions you might have. However, if you still need to contact customer service you can call them on a toll-free number, or send an email with your query.

    What types of debt can be consolidated with an Upstart debt consolidation loan?

    Your loan is yours to do with as you please, so you can consolidate any other personal debt you’d like. Upstart also offers a service where it will pay off your credit card debts directly with your current lenders, meaning you won’t have to do a thing.

    Upstart doesn’t make it clear if it offers this direct payment service for other types of debt, such as auto loans and student finance. If you have a lot of debts from different sources, we’d recommend you get in touch with Upstart directly before you apply to confirm it can contact other types of lenders.

    Once accepted, your consolidation loan will be paid off in just the same way as any other personal loan provided by Upstart. Just bear in mind the terms can be a little inflexible. You’ll only be able to choose a three year or a five-year term, and no extensions are offered. So make sure you’re comfortable with the repayment terms before you sign on the dotted line.

    The bottom line

    If you’re a young professional or have a thin credit history, then Upstart could be the perfect option for you. It's also a good choice if you have average credit but have found yourself rejected by other lenders. Upstart’s underwriting algorithm has been proven to help these groups out with debt consolidation loans, and the soft pull to your credit rating means there’s no harm in taking a look at the options.

    However, some might be put off by the high origination fees some lenders will charge, up to 8% in some cases. Others won’t like their applications being controlled completely by an AI algorithm. In addition, there are other lenders out there that have lower interest rates, more lenient credit score requirements, and flexible options. 

    If you have an excellent credit rating, you might want to try out another lender first for better rates, but we’d definitely recommend Upstart for those who’ve had trouble getting finance in the past.

    If you have any questions before you apply, feel free to get in touch with Upstart’s customer service team and it should be able to answer any questions you might have.