Your credit score is the first and most important thing lenders look at when you apply for a loan. A not-so-good credit score can keep you from getting that loan, and a bad credit score can keep you from getting even small amounts of credit.
While there are ways to boost your credit score, (here are 5 ways to boost your credit score in just one month), if you don’t have great credit there are alternatives to help in an emergency.
Your credit history is obviously important, but it can end up defining you without telling the whole story. Wouldn’t it be nice if more lenders thought like that?
Upstart puts the “personal” in personal loan. Instead of relying on your credit score alone, Upstart accounts for your education and work history to help you get a better interest rate.
While your credit is still part of the equation, Upstart values your future as well. For instance, student loans may be hurting your credit score, but by getting a degree you increase your future earning potential. Upstart doesn’t want to penalize you for spending money to go to school, and instead rewards it.
Upstart’s website says “through all of history, affordable credit has been central to unlocking mobility and opportunity,” and that basically summarizes their mission statement. People should have better access to credit and fewer roadblocks in getting it.
How Does Upstart Work?
The process of getting a loan is easy with Upstart. After spending about five minutes filling out an application with some basic information, you’ll be shown your rate and the terms of the loan. One more click and you can accept on the spot. Your loan may be approved within 24 hours.
After you’ve accepted your loan, you can set up automatic repayments to remove the stress of actively managing your account. You can pay extra amounts toward your loan as well without any prepayment fees.
Loans aren’t available in West Virginia and Iowa and other states have minimums, so check your state’s restrictions before applying for your loan.
How Can Upstart Help You?
Seeing your rate won’t impact your credit score, even if you don’t go through with the loan. If you do decide to take out a loan, be sure to check if the rate you are offered is better than what is on offer from other lenders. If you make your payments on time, your credit score will thank you.
Upstart is a great tool for handling debt as well. If your Upstart loan has a lower interest rate than the money you owe on your credit cards, you can use Upstart as part of the avalanche method of debt repayment to tackle the money you’re spending on interest.
Are You Elegible?
Personal loans are unsecured, which means they are riskier for banks in case of default due to the lack of collateral. Because of this, getting a personal loan from most major lenders can be difficult with a credit score less than 700.
To qualify for an Upstart loan, your credit score only needs to be above 620, opening up loan options for millions of Americans with credit score below 700.
Beyond the credit requirement, to be eligible for a loan you must:
- Be at least 18 years old
- Have a residential street address within the U.S. and a valid email address
- Have a regular source of income and an account with a major bank
It’s important to remember that debts have to be repaid, and all debt, whether it’s on a credit card, a mortgage or a personal loan, comes with interest payments above and beyond the principle of the loan. But not all debt is bad. (To get an easy-to-understand explanation, see our guide on Good Debt, Bad Debt, and How to Tell the Difference.)
Upstart’s value comes from the short-term financing they can provide if you find yourself stretched thin between side-hustle jobs or if you have an unexpected expense that busts your budget. It’s an extra tool in your financial toolbox.