Upstart Loans Versus Lending Club
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When it comes to taking out a personal loan, it’s important to do your research. Some companies are better than others and if you’re stuck between Lending Club vs Upstart we’ve got you covered. Our review includes side-by-side comparisons of rates, fees, amounts, qualifications, and more. We even outline the process of obtaining a line of credit with each of these lenders and how they handle partial loans. If you’re curious about Upstart vs Lending Club read on to get the facts about what each of these companies has to offer.
- The Good
- Easy application process
- Wider range of qualification criteria
- Fast deposit
- The Bad
- Low loan maximum
Upstart is a great option for recent graduates who did well in school. When looking at your qualifications for a loan, Upstart takes into account your academic achievements from the last four years, which makes it perfect for recent graduates who may not have built up enough credit yet. Apply for a loan here.
Other Loan Reviews
- The Good
- Easy to use
- Average credit welcome
- Partial loans available
- The Bad
- Customer service can be a bit slow
Lending Club is the gold standard in the best online loans. It was one of the first online companies to offer peer lending services. The company opened in 2006 to give people access to a wide range of loans, including personal, business and student loans. Check out our Upstart vs. Lending Club comparison to see how Lending Club stacks up to another top-rated loan service, Upstart Loans.
Other Loan Reviews
- APR
- 5.67% to 29.99%
- Origination fee
- 1% to 6%
Just like any lender, Upstart’s rates fluctuate depending on your credit report and other factors that it uses to determine your eligibility for a loan. The APR ranges between 5.6 percent and 29.99 percent. There is also an origination fee, which ranges between 1 percent and 6 percent. Upstart’s late fee is $15 or 5 percent, whichever is greater, and the check-processing fee is $15, but Upstart gives you the option to set up recurring monthly payments so you don’t ever have to be late.
- APR
- 5.99% to 32.99%
- Origination Fee
- 0.99% to 5.99%
Just like any lender, Lending Club’s rates fluctuate depending on your credit and other factors that it uses to determine your eligibility for a loan. The APR ranges between 5.99 percent and 32.99 percent. There is also an origination fee, which ranges between 0.99 percent and 5.99 percent. Lending Club’s late fee is $15 or 5 percent, whichever is greater, and the check-processing fee is $15.
- Maximum
- $25,000
- Minimum
- $3,000
The maximum loan amount for Upstart is $25,000, which is lower than most other online loan providers, making it hard for those who might want a larger loan. The minimum loan amount is $3,000, which is high and can make it difficult for those who are just looking for a quick, low-cost loan.
- Maximum
- $40,000
- Minimum
- $1,000
The maximum loan amount for Lending Club is $40,000, which is in line with most other online loan providers, while the minimum loan amount is $1,000, which is the lowest minimum among online personal loan providers, which makes it a good option for those who are looking for a quick, low-cost loan.
- Qualifications
- Average to excellent credit
- Academic records
- Proof of income
- Low debt-to-income ratio
- Must be at least 18 years old
Unlike other online personal loan providers, Upstart’s eligibility requirements are more inclusive, and it will take into consideration your academic records if you have graduated college within the last four years. In addition to that, Upstart requires that you be 18 years old, have proof of a source of income, a low debt-to-income ratio and at least an average FICO score.
- Qualifications
- Average to excellent credit
- Proof of income
- Low debt-to-income ratio
- Must be at least 18 years old
Like traditional loans, you need certain qualifications to get approved. Lending Club looks for an average credit score or above, along with proof of income and a low debt-to-income ratio. You must also be 18 to apply.
- Loan Process
- Application > Application Review > Loan Approval
Upstart’s application process is pretty straightforward. Since they don’t rely on individual investors, you can be approved for a loan pretty quickly. First, you have to fill out a basic application that includes personal and financial information. Upstart will then review your application and let you know if you qualify for a loan and what your interest rate will be. If you qualify, you continue with the application process, which requires additional financial information. Once your application is complete, Upstart will notify you if you’ve been approved for the loan or not, and if you accept the loan terms, the amount will be transferred to your bank account the next day.
- Loan Process
- Application > Loan Offers > Application Review > Investors Fund Loan > Loan Approval
Lending Club, since it is a peer-to-peer lending service, has a slightly more complicated application process. First, you fill out an application that includes personal and financial information. You are then assigned a “grade” that will determine your interest rate and tell investors how desirable you are as a borrower. You will be presented with multiple loan offers, and you can choose one or decide to cancel your application. Once you pick a loan offer, your application will be reviewed and approved, and then presented to individual investors (who are screened by Lending Club.) Investors have one to two weeks to decide whether to fund your loan. If your loan is fully funded, it is deposited into your account within four business days.
- Partial Loans
- No
Upstart does not offer partial loans. If you are not approved for the loan amount you originally asked for, you can apply for smaller loan amount later.
- Partial Loans
- Yes
Yes, Lending Club offers partial loans. If investors commit to at least 60 percent of your loan, you can decide to accept the partial amount or turn it down and apply for a new loan.
Upstart Loans: User Reviews
Lending Club: User Reviews
Upstart Loans: Comments
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There are many new start-ups in the lending world these days, but Upstart is one of the most interesting. Not only does it cater to recent graduates who need financial help, but it also specializes in funding tuition costs with student loans for those who are interested in learning how to code. This makes it a perfect lending option for young techies who not only want to get a head start on their career, but also their finances.
How Does Upstart Work
Even though their approval criteria may be a bit unconventional, Upstart operates very similarly to a traditional loan products and services. You go online and fill out a form that asks you for some personal and financial information. It will then send you an estimated rate for your loan. If you agree with the rate, Upstart will gather more information and prepare the loan terms to make it official. Once the loan is approved, you will get the money the next business day.
The approval process is a little bit different though. Upstart does look at things like credit score, employment income and income-to-debt ratio, but it also uses computer models to factor in your college degree, your major and your job history to give Upstart a fuller picture of who you are as a financial person.
These extra criteria are perfect for someone who doesn’t have much credit report history but has shown great responsibility in school and previous jobs. It speaks to the problem that a lot of people have with credit scores; they don’t give the whole picture on how financially responsible a person is.
Upstart also makes it easy to set up recurring monthly payments, and won’t penalize you for paying off your loan early, which many loan companies do. Upstart offers both three-year and five-year personal loans, so you can choose which will be easiest for you to pay off. It also offers a range of options, from student loans to debt consolidation loans.
Is Upstart Legit?
While Upstart is only 5 years old, it has been busy in those five years. It has funded more than $700 million in lending so far, and has approved 60,000 loans. Upstart is also one of the only online lenders to completely automate a portion (25 percent) of its loans, which means both the approval process and loan funding are all down through algorithms and artificial intelligence.
It was founded by two ex-Google employees and is backed by Cross River Bank, which is backed by the FDIC, so you know your money is safe. It is also consistently rated as one of the top online loan companies operating today for its products and services.
Common Upstart Reviews
Upstart may handle online lending in an unconventional way, but its users tend to love the service. Customer service reviews on sites like Credit Karma and TrustPilot give mostly five out of five star ratings to Upstart, with glowing reviews on everything from Upstart’s quick and easy online process to its exemplary customer service.
Most of the negative reviews on these sites seem to be from people who didn’t understand the process, wanted to cancel the loan terms after it was approved or were upset about being charged late fees. As with any financial service, always read the fine print before agreeing to anything, although Upstart is pretty upfront about all of their fees and rates.
From a consumer product review standpoint, Upstart is generally ranked near the top of the reviews because of its ability to lend to people who might not normally qualify.
Is Upstart Right For You?
There are hundreds of loan providers available now, so how do you know if Upstart is the right one for you? It really comes down to a few simple questions:
- Do you have excellent credit?
- Do you have average credit?
- If so, have you graduated in the past four years?
- Do you have a good job history?
- Are you looking for student loans that are different than traditional lending?
If you have excellent credit, the world is your oyster when it comes to loans, so you can really choose any lender and be approved for a loan. The issue for people with excellent credit isn’t whether they can get approved or not, but rather what the interest rate is going to be. With Upstart, a good academic record coupled with excellent credit could score you a very low interest rate. If that’s not the case, you might be able to find a lower interest rate elsewhere. It’s also a good company to use if you want to set up easy monthly payments.
If you have average credit, Upstart might be a good place to start. People with average credit or very little credit history can often have issues securing a loan, so lenders like Upstart that look at outside factors when approving you can only help.
The caveat to this is that if you haven’t graduated in the past four years, Upstart generally won’t look at your academics as a factor, which leaves you back where you started. In addition, if your grades were poor, you might also have issues getting approved. Luckily, Upstart also looks at your job history, so if you have had a steady job for many years with good standing, you might also have a good chance of being approved.
The point is that there are many different factors that Upstart uses when approving candidates, so if you’ve been turned down for other loans, you should take a look at Upstart.
Lending Club was once the darling of the online loan world, offering a ground-breaking idea with peer-to-peer lending, where average people could invest in other people’s loans. Since then, several other companies have popped up that utilize the same type of lending, some with new, fresh spins on the practice. This has left Lending Club a little bit behind, however, it is still a great online loan service for those looking for good rates and good service.
How Does Lending Club Work
Lending club is a peer-to-peer lending service, which basically means that ordinary people (who are approved by Lending Club) can invest money to fund your loan. They make money off of the interest you are charged, so it ends up being a win-win.
The first step in getting your loan is filling out an application. Then Lending Club will rank you based on that information so it can determine your interest rate. It also shares that ranking (not your personal information) with its investors when it sends out your loan to be funded. Lending Club will then give you a list of loan offers, and you choose the one that best fits your needs.
Once you’ve selected a loan offer, Lending Club will send the offer details and your ranking to its investors, who can then decide if they want to fully or partially fund your loan. Investors have one to two weeks to decide on funding your loan, so the process can take a while. Once the time is up (or if your loan gets fully funded before the deadline), you will then be presented with the full loan or a partial loan. You then decide to accept or not. If you do, you will see your money deposited in your bank within four business days.
Lending Club offers both three- and five-year loans, and will go over a payment plan with you before you accept the loan.
What Makes Lending Club Stand Out?
The biggest thing is Lending Club’s peer-to-peer lending model. If offers a two-tier business model, in that it can cater to both borrowers and investors. It also keeps Lending Club from having to have a ton of its own cash on hand to fund the loans. It’s also a plus for borrowers because some investors may be more willing to take a risk on people whose credit background is not stellar. If your credit score is not where it needs to be, check out some credit repair reviews to find a credit repair company that works for you. To learn more, check out our reviews of the top credit repair services, Lexington Law compared to Sky Blue.
The other thing that makes Lending Club stand out is its option for partial loans. This is generally something only peer-to-peer lenders do, since there may be more than one investor funding a loan. So, if your loan is 60 percent funded or more, you have the option of taking the partial loan, which is better than just being turned down and ending up with nothing.
Common Lending Club Reviews
Lending Club is pretty well-received in the online loans world, so it’s not much of a surprise that it ranks pretty well among consumer product review sites. For example, NerdWallet gives Lending Club 4.5 out of five stars.
Customers of Lending Club tend to agree. Online customer reviews of Lending Club are generally five stars, with few exceptions. Most of the reviews focus on how quick and easy Lending Club is, since everything is online and accessible with just a click of the mouse. Many customers talked about Lending Club giving them the ability to consolidate their credit card debt, which is a common use of loans from Lending Club.
Negative reviews seem to focus on people who weren’t aware of the origination fee, or felt the interest rates were too high or the process took too long.
Is Lending Club Right For You?
Lending Club does have some unique features that set it apart from other online loan services, which means it can cater to certain needs better than other services. Here are the questions you need to ask yourself when considering Lending Club:
- Do I need money quickly?
- Is my credit score not the best?
- Would I be OK with not getting the full loan?
If you are having a financial emergency and need a loan quickly, Lending Club is probably not the best place to look. Since it is a peer-to-peer lending service, it relies on individual investors to fund each loan. Once you finish your loan application, Lending Club has to send your loan details to all its investors and wait for people to fund your loan, which can take up to a week.
If, however, you can wait and you don’t have the best credit score, Lending Club is a good choice. Since it offers loans to individual investors, it is up to the investors to decide if they want to take a risk on someone with lower credit. There are investors who are willing to take that risk, meaning it might be easier to get a loan through Lending Club than traditional loan services.
Another thing to consider is the fact that Lending Club offers partial loans. If you don’t need the full loan amount, and your credit is not the best, getting approved for a partial loan is better than being turned down altogether. If, however, you have really strong credit, you will probably end up getting approved for the full amount anyway. If you aren’t, you can probably easily get a loan through another online loan service.
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